Sunday, May 18, 2008

This is a picture from the Weimar Republic; a woman heating with cash money as inflation made it useless. For money is actually worth nothing, only what you can get for it at a current exchange rate from someone who has the things you need. And now we need more to buy the things we ordinarily use, like food and fuel. The question is why? Is oil more scarce, at least scarce enough to say, jump in value so much over this time? Not that scarce, though the good, easy to get stuff is going and will be gone...we and others are using more, but not that much more than three or four years ago...so what gives? It is about our money, and what its value is. Back when Nixon dumped the old Bretton Woods system, he made a deal with the Arabs; all oil deals would be done in dollars. And largely, except in a few cases, that is how it is done to this day. You want to buy or pay for oil, you do it in dollars. It makes our currency the baseline that every other currency is compared against. This works well, except when everyone starts seeing the fundamental basis for your economy and the attached value to the currency is a lie, and they know your currency is toilet paper waiting to happen. Such as when you fund war debts by cutting taxes and printing money, as the Bush administration has been doing for a few years now. Or when they realize the three card molly game you played with U.S. housing debt, and overall debt, for a half a decade to prop up an economy going down the drain quickly because of your messed up policies. Other oil producers want to deal in Euros, partly for political reasons, but also because they know we are just printing money and not actually paying for what is happening. Oil is not going up; the value of our cash is going down, probably by 30% in the last two years as judged by the rest of the world. So, when you hit the gas pump next time, thank your republican friend or relative for their blind support of someone with their hand in your pocket...and buy a smaller car and a woodstove. You might need it sooner than you think.

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