Quote:
Originally Posted by zabijaq
Yep. And they might earn huge $, when new president will be elected and things would go better, no more HUGE deficit for spreading democracy ;D SO money they have accumulated with high barrel/dollar will have more value then.
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Problem is zabijaq, OPEC are not earning more dollars for oil. The 'real' price of oil is around $50-$60/barrel and the $97ish level is due to hedging and market speculation. It's almost assured that every time the dollar depreciates in value, the price of oil will increase, partly because investors are looking for a more stable investment area (or one where they are not going to lose billions).
Sure, the core underlying problem is debt and prob little chance of reducing that level of debt over a short timescale. Others have played their role in the debt problem - predatory banks, lack of fiscal control and people being encouraged to take mortgages which they could not maintain. Many of these mortgagees are prob 'innocent' and just wanted a home - many are paying their mortgages but on a depreciating asset. It's unfortunate that they will prob suffer more than anyone.
2008 is likely to be an awesome bad year in economic terms with ripples, not just in the US, but globally. The US economy is going to be under severe pressure with higher costs and increased credit crunch effects. All bad news and no signs whatsoever of a ray of hope.