Monthly Archives: July 2008

Commodity Prices, Again: Are Speculators to Blame?

In the 1955 movie version of East of Eden, the legendary James Dean plays Cal.  Like Cain in Genesis, he competes with his brother for the love of his father, a moralizing patriarch.   Cal “goes long” in the market for beans, in anticipation of an increase in demand if the United States enters World War […] Continue reading

Posted in Commodities, Dollar, Oil | Tagged , , | Leave a comment

Good International Exposure for Obama and McCain

Senator Obama is on a vist to the Middle East and Europe.   Senator McCain went to visit Colombia earlier in July.   These trips suggest a seriousness of purpose that American presidential candidates often lack.    They offer us hope that the candidates want to learn how to do the job well.   Furthermore, they offer a hyper-attentive world […] Continue reading

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“No Atheists in Foxholes.”? No Libertarians in Financial Crises.

Someone this week asked me what I thought of policy-makers who ex ante profess a free-market ideology and acute sensitivity to the dangers of moral hazard from financial bailouts, but who toss that ideology overboard when faced with a financial crisis.  The reference was to Treasury Secretary Henry Paulson’s lobbying this week in support of a rescue for Fannie […] Continue reading

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Offshoring is a Dubious Policy, When the Question is Oil Drilling

 
President Bush yesterday eliminated a 27-year executive moratorium on off-shore oil drilling (NYT, 7/15/2008, p.A13), a move also supported by presidential candidate John McCain. 
The Democrats responded:
(1) that this was an election-year stunt,
(2) that the move would be too small to make a difference
(3) that it would bring no downward pressure on oil prices […] Continue reading

Posted in Commodities, Conservatives and Liberals, Gas Prices, Oil | Tagged , , , | Leave a comment

UAE and Other Gulf Countries Urged to Switch Currency Peg from the Dollar to a Basket That Includes Oil

 
The possibility that some Gulf states, particularly the United Arab Emirates, might abandon their long-time pegs to the dollar has been getting increasing attention recently (for example, from Feldstein and, especially, Setser).   It makes sense.  The combination of high oil prices, rapid growth, a tightly fixed exchange rate, and the big depreciation of the dollar against other currencies (especially […] Continue reading

Posted in Commodities, Dollar, Emerging markets, Iraq, Oil | Tagged , , , , | Leave a comment