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10 Notes on the Crude Oil Fixation

This country needs to sell higher quality, & lower cost, goods & services - period. The requisite changes necessary for a competitive country are not being discussed.

10 Notes on the Crude Oil Fixation

I believe that I read somewhere that the production of the world's major oil fields are in decline. Even so, a "loose" monetary policy fuels speculation as inflation rises. It's a tell-tale sign.

As for the J-curve, I don't think it applies to the U.S., esp. since 85. If it did work then the 30% decline in the trade-weighted exchange value of the U.S. dollar since 2000 would have substantially narrowed the current account deficit.

Paul Craig Roberts tells the real story: "A quarter century ago US oil imports accounted for the US trade deficit. The concerns expressed over the years about "energy dependence" accustomed Americans to think of trade problems only in terms of oil. The desire to gain "energy independence" has led to such foolish policies as subsidies for ethanol, the main effect of which is to drive up food prices and further ravage the poor.

Today oil imports comprise a small part of the US trade deficit. During the decades when Americans were fixated on "the energy deficit," the US became three to four times more dependent on foreign made manufactures. America's trade deficit in manufactured goods, including advanced technology products, dwarfs the US energy deficit."