The Weak Dollar...

[Myrddraal]

That's interesting. Wouldn't that suggest that the majority of the companies that export goods to the US have been selling above their costs in the past, with room to spare. If so, that can't last forever. Companies with some supernormal profits may be willing to accept losses in order to preserve their market share, but at some point they'll not be able to afford to export to the US.

[Sigurd]

Companies with big US dollar loans are making huge profits.
The state which take taxes from oil sale are not getting as much as they could, even with a barrel price of $99.00.

What are the petrol prices over there?

[Odin]

Companies with big US dollar loans are making huge profits.
The state which take taxes from oil sale are not getting as much as they could, even with a barrel price of $99.00.

What are the petrol prices over there?

3.00 dollars a gallon on avarage.

Valid observation as well Sigurd, while a weak dollar helps the import export situation one of the down sides is oil is traded in dollars. So if your an oil producer your making less and less money on each barrel.

Hence the rise in price. This is one of the negative impacts the U.S. has on the world economy. The dollar keeps loosing value as the feds try to soften the blow of the sub prime loan market by lower rates. Meantime jo shmo in singapore pays fuel prices based on a per barrel cost calculated in dollars.

[English assassin]

Meantime jo shmo in singapore pays fuel prices based on a per barrel cost calculated in dollars.

One thing I haven't understood is why this has fed through to higher pump prices in the UK.

(1) we buy oil in puny ( ) dollars, but I pay for my petrol in nice strong pounds, so why hasn't the pound's appreciation against the dollar counteracted the higher dollar price for crude?

(2) most of the pump price is tax anyway.

I suspect I am being ripped off.

[Odin]

One thing I haven't understood is why this has fed through to higher pump prices in the UK.(1) we buy oil in puny ( ) dollars, but I pay for my petrol in nice strong pounds, so why hasn't the pound's appreciation against the dollar counteracted the higher dollar price for crude?

Because the price of oil and gas has matched the dollars drop. So you arent paying any less because your currency is worth more then the dollar. Opec isnt making less money, there making more or the same. So the value of your currency dosent enter into the equation as long as the price for oil/gas rise with each drop of the dollar.

(2) most of the pump price is tax anyway.

I suspect I am being ripped off.

Perhaps, but you can take the trains. In the states we really only have rail service in major metro areas. The rail system in the UK and EU is far superior.

[Shahed]

Yeah it is far superior in London, superior in endless delays & unsurmountable ques of "technical difficulties". ;)

[Husar]

I suspect I am being ripped off.

I think most of us europeans are, and it's not just oil.

On Steam Call of Duty 4 costs 69$ for Europeans to "adjust" for the low dollar (they just make us pay 50EUR even if that means they get 20$ more from us than from Americans ). It's similar with Computer Hardware as I described before, the companies just use the same pricing as before, the exchange rate just means they're making more profit themselves.

[Ironside]

One thing I haven't understood is why this has fed through to higher pump prices in the UK.

(1) we buy oil in puny ( ) dollars, but I pay for my petrol in nice strong pounds, so why hasn't the pound's appreciation against the dollar counteracted the higher dollar price for crude?

(2) most of the pump price is tax anyway.

I suspect I am being ripped off.

Well it the case in Sweden. The gasoline prices have barely increased since the dollar was on 10.60 compared to now when the dollar is 6.24. And that's while the oil price has almost doubled.

[Ice]

That's interesting. Wouldn't that suggest that the majority of the companies that export goods to the US have been selling above their costs in the past, with room to spare. If so, that can't last forever. Companies with some supernormal profits may be willing to accept losses in order to preserve their market share, but at some point they'll not be able to afford to export to the US.

Possibly. As stated in the article, I believe, many countries in Asia (China for example) keep their currency pegged to the dollar, so it really hasn't affected them too much.

For European exporters, I'd have to agree if the dollar keeps losing it's value they will be in trouble. However, I believe this isn't permanent situation and the US Dollar will rebound sometime. As for now, they will accept lower profits to keep their share in the market.

[Vladimir]

One theory put forward is that the weakening of the dollar is being allowed to occur in order to use it against China. China has (or at least had) a HUGE stock of US Dollars and it would be a nice slap in the face.

Oh and Myrddraal, that's called making a profit. Every company tries to do that. It can't last forever but it is the point of being in business.

[Ramses II CP]

Part of the core theory of economic globalization, as I see it, is currency stability and inflation insurance. If the weak dollar continues through to next year it will be an interesting test of the theory. Will foreign spending make up the local (i.e. national) shortfall? Is there even going to be a shortfall (Current projections say... maybe. Typical.)?

[Big King Sanctaphrax]

This should probably be in the backroom.