Monday, February 03, 2014

Beating Retreat

At a time when US CAD was getting out of control and the US dollar was at the verge of collapse as global currency in 2005, table was turned on its key rivals, Euro and Uno. America always knew they could curb their CAD by cutting down on their energy imports. They knew they had the resources but it was not economically viable to use those resources at those price levels. Financial crisis of 2007/8 taught them that they could push the world oil prices by pumping in irrational money into the developing world, thereby increasing their buying power and the crude price. Therefore, after the crash of 2008, Ben kept this irrational money flowing out into the third word in the name of 'QE' to keep the world demand and prices for crude oil high. Besides, US did everything politically right, viz. Libya, Iran, Syria, North Korea (besides digging) to keep the world oil prices soaring. ...and finally they did it. US dollar remains the undisputed global currency. 
Ben has re-written economics. He would be hailed and praised in the annals of macro economics. His maverick theories will be taught from Stanford to Oxford to IIM. Propulsion of emerging economies  and creating artificial demand would be talked about more than the shale oil boom in America. His would be a role model for even those nations who may not have natural resources to rescue them out of the woods ...and of course without the fire power of greenbacks.

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