Back in the late 70’s, the last time our country experienced massive unrest in the Middle East and an energy crisis along with inflation and a possible recession – although in the late 70’s and early 80’s it was a definite recession, I can remember watching television. The dollar and its standings against other global currencies was always followed by what an ounce of gold and an ounce of silver cost. You could watch the dollar fluctuate with the gold price.
Nowadays, with inflation in progress and economic growth stagnant and a possible recession looming, you watch the television for economic news. The dollar’s ups and downs are directly tied to the ups and downs of the cost of a barrel of oil which is a future delivery item. Gold is an item that is here and now. It has some basis – I would hope – in most economies. Crude oil – traded on a mercantile trading basis and is a future delivery item – should not be the basis of a country’s economy. Number one, it is not here and now. It is a futures item. Number two, our ecomomy is fluctuating on the price of crude oil but we import 70% of our crude oil so it is not “our” crude oil. This puts our economy in the hands of others, not us.
Yet, on a sometimes daily and definitely weekly basis, the value of the dollar has plummeted as the price of future delivery of a barrel of crude oil has risen.