Oh boy...OPEC Interested in Non-Dollar Currency

I just purchased a gallon of full milk at Sam's club for $3.09. The difference between what you pay for milk and what I paid for milk is related to transportation cost which is associated with the increasing cost of oil which is increasing due to a growing global demand.

 

Assembly is service, not manufacturing.

The cost of oil is artificially managed by OPEC. The free market sets the price, but OPEC dictates the supply.

The rest of your opinions are unsourced. And you're trying to make a simple argument much more complicated than it is.

 

Right, global demand has gone up 44% for oil in the last 3 months.

It's now being traded literally as, "black gold".

 

You got to be kidding me, how is assembling a car or a tractor on the assembly or building a car on the assembly line not manufacturing.

Which would be true expect OPEC is running at full capacity.

Here are the sources to the other points.


Pass-through rates

http://ipezone.blogspot.com/2007/11/why-isnt-lame-causing-us-inflation.html

Companies hedging currency risk

http://findarticles.com/p/articles/mi_m3870/is_7_21/ai_n15683453

 

No demand hasn't gone up 44% but something else happened since August, the bond and mortgage market basically stopped functioning. Meaning sellers of bond can’t sell corporate or mortgage bonds since no one wants to buy them yet the people who used to buy these financial instruments need to place their money some where and they placed it in oil.

 

The reason why Iran and Venezuela have an interest in hurting America is because America has shown an interest in hurting them. What would you do if you were threatened by another country? When you are threatened by an enemy, you do whatever it takes to beat them. If we didn't threaten Iran and Venezuela, we wouldn't be in this mess.

The strategy that can be used among countries is the same that can be used among people: leave people alone, and a lot of the time, they will leave you alone.

In the case of countries, if they don't leave you alone, only then should your military force be used as a defensive. If politicians followed this advice, there wouldn't be any wars. Think about that one for a minute.

I think there is a clear connection between rising oil costs and the value of the dollar. As the dollar continues to fall, and the cost of oil and transport goes up, you're going to have a country that enters a major recession, and a lot of people are going to be pretty poor.

 

Most of John Deere equipment is made in the USA.

However, as international commodity prices like grain and oil raise the prices will rise domestically.

Also the price of farmland is increasing which means higher costs.

Properties in South America are risky business. Some countries south of the border have currency exchange regulations that make it difficult for foreigners to convert to dollars.

There is always the risk of appropriation of farmland and undeveloped property.

 

This is what I was thinking as well. I'm uneasy about owning property in the U.S., let alone South America. Even with our supposed Constitutional protections here at home, the government can now take our homes through eminent domain, and I can only imagine that most South American countries don't have many protections for private property against government seizure.

 

The registry offices can also be really bad. Sometimes there is conflicting claims on property or someone corrupt in the registry office that changes the titles. This is more of a problem for undeveloped land or farmland.

As long as you can afford to lose the money and you can get some personal enjoyment out of it then I wouldn't worry about it.

Montevideo looks nice. Here's a link for some real estate
http://www.uruguayland.com/

 

What about the price increases prior to August? Why did oil go to $80 before the bond and mortgage markets started destabilizing?

 

Oil started the year around $55 per barrel, with hurricane fears it reach $65 a barrel in the summer then the credit market fell apart and oil skyrocketed to $100 a barrel.

The dollar is down what 40% in the last 3 years while oil is up 500% If the falling dollar is driving up the price of oil as you claim then while are they not closer in terms of percent. What I mean is the dollar is down 40% then oil should be in that same range being up 40-50%