The Wall Street Journal-20080115-Oil Isn-t Only Problem With Weak Dollar
Return to: The_Wall_Street_Journal-20080115
Oil Isn't Only Problem With Weak Dollar
That eye-popping chart, comparing the price of oil in dollars, euros and gold, headlined "The Greenback's Fall," says it all ("Oil and the Dollar," Review & Outlook, Jan. 4). It shows that since mid-2003, the cost of oil if priced in gold would have dropped slightly. When priced in euros, it has roughly doubled (bad enough), but when priced in dollars, it is up roughly 3.5 times, an uncontrolled missile shooting toward the heart of the U.S. economy.
Demand-supply imbalances can create a rising oil-price trend, but that doesn't explain why it would rise almost twice as fast when priced in dollars as when priced in euros. Many factors can affect the dollar's exchange value, but this alarming oil-price spike is caused in large measure by our shoveling mountains of dollars to foreigners so we can import a major proportion of our energy needs instead of producing more locally.
Why are vast areas of our federal lands off-limits to all but a few wilderness backpackers? Why are huge prime prospects in Alaska and our 200-mile continental shelf also off-limits to energy development? An implication that politicians -- who respond to external pressures -- are largely responsible overlooks a root cause, quasi-religious enviro-fanaticism.
Following the devastations of the Great Depression and World War II, a beneficial new genre of enviro-worship evolved, with the noble purpose of rescuing Goddess Earth from human depredations. Well- intentioned parishioners joined quasi-religious denominations, including the Sierra Club, the Wilderness Society, Greenpeace, among others, and they performed great good works, despite evidence of an evolving "crusader" syndrome among the leaders.
Perhaps those leaders may now realize their overly-restrictive land- use policies, arrayed against domestic energy development, have put the health of the dollar, if not the entire economy, at risk for all Americans, including their members. To avoid eventually reaping the sorry fate of the original crusaders, I pray they soon see the light, and exploit an upcoming opportunity to use their expertise in helping to ensure prudent development of all our fossil-fuel energy resources.
M. Robert Paglee
Moorestown, N.J.
---
This was the first admission that I can recall, reading in a major U.S. newspaper, the truth about the dollar. The price of oil isn't the only thing affected by the devaluation of the dollar, everything we buy is affected. Over the past several years consumers have enjoyed and borrowed off the easy credit and supposed appreciation of home values. Where one man sees appreciation, another sees the devalued dollar. Really, is the house worth that much more? Or will you soon need to carry cash around in a bucket to buy one? This devaluation has been going on for years, and it's only been the government's attempts to slow down the hemorrhaging that has propped up the illusion of value for so long. At some point it can't continue. At some point, someone somewhere has to actually pay off debts.
William Bornstein
Danvers, Mass.
