It’s all relative

The high price of gasoline is getting the headlines, but it’s partly a symptom of another problem: the US Dollar is trading lower against almost every currency. Even if crude oil remains at the same number of riyals or bolivars, it will simply take more dollars to buy a barrel of crude.

And why is the dollar so weak? The budget deficit. “The U.S. twin deficits have been the main driver in weakening the dollar broadly, sending it to a nine-year low against a basket of currencies and down against the euro by 10 percent in the past six months.”

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