Yet Another Reason Why It's Not "Big Oil"

I like this chart because it shows you two things;

1. That part of the reason gas is so expensive here in the US isn't so much the scarcity of oil (though that has its effect too), but the fact that the US dollar has lost so much of its value that it takes that many more dollars to buy a barrel of oil. Note compared to the Euro oil is not that expensive. Alas there is a price to pay to think that you can just borrow to live and not produce.

2. It compares three currencies (lest you have forgotten that gold was at one time a currency). If we were to be on the gold standard then oil really wouldn't be any more expensive than it was in 2000.


Now you can go ahead and blame the Fed for debasing the currency and blame Alan Greenspan because you have a headache, but the truth is that what really gives a currency it's value today is the wealth that you can buy with it.

For example I cannot go to Malaysia with US dollars and buy stuff. I have to convert it into the Malaysian currency, the Ringgit . Thus the only thing you can buy with US dollars is the stuff sold in the US. Therefore the value of the dollar depends on how much stuff Americans produce, not just "because the government says it has value." And if Americans insist on borrowing money from their homes to go and buy a big screen HDTV made in China, they are not producing anything of value here and therefore debasing the currency.

So if you want cheaper gas, cheaper imports in general, not to mention a whole slew of benefits that could be attained by producing more and spending less, take a second job, start paying off your debts. Quit using your house as an ATM and become an old school American. Increase the value of the dollar.