"Once again the professionals? were wrong about oil prices. Am I dreaming? Oil was to be $20 to $25 for the last 6 months or so. Now it looks like OPEC isn't happy with the purchasing power of the $US so a possibility is that they will look at a basket of currencies as well as a basket of prices as they do now,
If oil is priced with the EURO being a significant part of the formula, I would expect the $US will get beat-up worldwide as dollars now held for oil purchases are sold. This could be a bad scene for the buck. For ECA shareholders, however, it could be a bonanza! Because of Canada's trade dependence on the U.S. the $C will mostly follow the $US and depreciate relative to the EURO as is has done in the past 12 months."
Looks like the EURO is becoming the world standard, although the EU is not prepared to lead the markets. The US actually needs a weaker dollar to alter trade imbalance. But with our goods coming from the likes of China, who's currency appears tied to the dollar, there is little price increase on imported goods that is needed to stimulate domestic competition. That's part of the problem with present global trade situation. Some say China's fast growing energy consumption will cause even higher oil prices. Eventually, imported goods prices would rise reflecting these costs, meanwhile, US consumers will be buying the foreign hybrid autos, further eroding US manufacturing (if plants are in US, asset ownership shifts to foreign hands).
And why does gold continue to rise? Is it the instability of middle-east or the dollar or both?