Not that I can say I have all the answers but please bare with me on this.
That was a very good post and quite informative. Although, a very important factor was left out of the report in regards to the value of the dollar. The dollar being the worlds primary currency for trade has a direct effect on pricing of goods transfered. Scarcity economics applies to the value of money as well. Currently the US is importing more than we are producing coupled with the fact that most of what we produce is done so on borrowed money that is furnished by foreign governments. This in my opinion is what the main culprit is in scarcity economics and then is compounded by the actions of investors trying to recoup their losses that occur in the transfer of dollars for goods, EG. higher prices. Regardless of supply and demand, if your currency is constantly losing value the price for all your goods and services will naturally increase, creating an even deeper sense of scarcity. The only real way to stabilize prices is to stop borrowing money,start paying down the debt, cut imports and change the tax code to penalize US companies that move their operations overseas and reward those who reinvest a portion of their revenues in increasing their production capacity of their companies and adding tax incentives to upgrade and modernize their plants.
Re: why should oil sell for $119 a barrel
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