Wednesday, July 09, 2008

In which TO is sanguine about the economy

Sure, gasoline is expensive, but since the dollar is weak, prices in the US look really good to outsiders getting that influx in cash. They are turning around, borrowing more dollars to build plants to produce cheaper exports in their own country and that keeps our manufactured products cheap. Meanwhile, foreigners can buy our goods at a discount to them and invest their excess money here.

That is the reason high gas prices are not killing the economy. And I think we will see a oil price collapse, soon.  Gas prices are up, demand is down and I see many fewer cars waiting at pumps.  If Congress pulls their heads out and allows drilling, combined with this lower demand, means we would see gas under $3 by Labor Day.