$105 Oil and the Dollar?

Spring has sprung in NY. I'm grateful to the Winter gods that they have moved their ill wind and gave us back sun. Of course, in NY, it means suffering heat and bugs soon, but one step at a time.

Interesting thing on NRO.....

"To be sure, today’s Fed is no Carter Fed, so $105 a barrel is a silly prediction. But the Fed can do better. What is needed is a commitment on the part of the Greenspan Fed to dollar stability, ideally in terms of gold. A message like this would give oil producers the confidence to make up for any shortfalls with new supply. As economists Peter Huber and Mark Mills note in their latest book, The Bottomless Well, we’re not running out of oil."

"On the other hand, oil producers are arguably running out of patience with a floating unit of account that makes it very difficult for them to commit investment capital to the discovery of a commodity that is extraordinarily volatile in dollar terms. Dollar price stability will remove major uncertainty from oil exploration and will insure that we have the necessary supply at stable prices as countries hopefully continue to liberalize their economies, and in doing so, continue to grow. "

John Tamny on $105 Oil and the Dollar on NRO Financial