Friday, July 04, 2008

What effect does the falling dollar have on the price of oil?

With the price of a gallon of gasoline at about $4.50, since 2000 until the beginning of 2008, the falling value of the dollar accounts for nearly $1 of this price. In other words, it would be $3.50 if the dollar had kept the same value of the year 2000. If the dollar had actually strengthened by the same amount as it weakened, the price of gas would be nearly another dollar less, or almost $2.50. So, a question might be: "How do we strengthen the dollar?"

The two-page analysis. Sources for this analysis are: Decline of the dollar since the 1700s; Price of the Euro (Inverse value of the dollar); Price of Oil

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