American Economy Starts Playing Catch-Up
Read the Financial Times Article, Published on August 15, 2008
The dollar has reached a two-year peak against the British pound as well as a six-month high compared to the Euro. Our beloved $$$ are still worth less than the Pounds Sterling or the Euro, but it is making a strong advance to overtake the two.
The $ has been surging forward in value over the past 11 days, an unbelievable streak that hasn’t been achieved for 35 years! Market prices for commodities such as crude oil, platinum, copper, aluminium, corn and soyabeans have been falling from the record highs that created the “Oil and Food Shortages”.
Markets are becoming increasingly aware that the United States is the best placed economy to weather the upcoming “economic downturn” that has almost everybody else in the world afraid. The good news is that we Americans have weathered what I believe is the worst of the storm.
The price of oil rose as speculation for the future of the industry diminished. It diminished because everybody was looking into alternate methods of creating fuel, namely E85 ethanol. Through the government subsidies and the rather large demand for research into this industry, farmers started using their corn for E85 instead of food, thus increasing the price of corn and other types of food. Then the housing bubble burst. Ouch. Gas and food are ridiculously expensive and now your house is worth $100,000 less than it did when you bought it. Congratulations. You’re now poor.
The good news, like I said before, is that the market has accounted for these changes and adjusted accordingly. Oil now costs only $113.79 per barrel! Do you realize that only a month or so ago, oil cost over $150?! Since we started talking about offshore drilling and other practical ways to really solve the “crisis” of high gas prices, the cost of crude oil has dropped.
We have faithfully and responsibly weathered our way through the worst of the economic storm and the only way from here (at least in America) in hopefully up.
I’m hoping that by the time I graduate from school the dollar will have returned to a point where I can afford to be in Europe for a while.
This is why the “Hope”less commercials and messages of Barack Obama and company are so frustrating to me. The economy has been doing awful, but it’s just a fluctuation in the market. Things will return to normal and we will be on top again, just stop apologizing to everybody already and be the Americans the world expects us to be! (I am of the firm mindset that the rest of the world thinks we’re @$$holes, but it’s better than being condescended by arrogant foreigners.)
