Larry Kudlow writes King Dollar Will Cut Oil Prices in Townhall.
A stronger dollar is key. The Joint Economic Committee just put out a study showing that a 10 to 15 percent appreciation of the greenback to pre-recession levels (before the Fed launched its massive dollar-creation, pump-priming campaign) would lower gasoline prices by 43 cents. So if the Treasury and the Federal Reserve strengthened the value of the dollar, oil and gasoline prices would decline.
There are real supply and demand issues, but perhaps the industrial commodities are in fact the stable currencies we seek. Those that feel we should be on a gold standard…. well we are. We are also on an aluminum, iron ore and yes, an oil standard. The higher price oil may be an illusion: perhaps what we are really witnessing is the lower value of the dollar.