Subject: [big campaign] FW: RELEASE: Bush's Weak Dollar
From: "Adam Jentleson (CAPAF)" <[email-masked]>
To: "big campaign" <[email-masked]>
Date: Tue, 27 May 2008 15:08:33 -0400
List-Id: <bigcampaign.googlegroups.com>

New analysis from CAPAF shows that 40% of the increase in oil prices is
attributable to the weak dollar.  

________________________________

From: Center for American Progress [mailto:[email-masked]] 
Sent: Tuesday, May 27, 2008 2:54 PM
To: Adam Jentleson (CAPAF)
Subject: RELEASE: Bush's Weak Dollar

Center for American Progress <http://www.americanprogress.org/>   

For Immediate Release
May 27, 2008

Contact
John Neurohr, 202.481.8182 
[email-masked]

RELEASE: Bush's Weak Dollar

By Scott Lilly

READ THE FULL REPORT WITH CHARTS HERE
<http://www.americanprogress.org/issues/2008/05/weak_dollar.html> 

WASHINGTON, DC - The Center for American Progress released a report
today outlining the grave impact the weak dollar has on consumer prices,
including the analysis that 40% of the increased price of oil for
Americans is attributed to the weak dollar. In dollars, oil cost about
28 percent more on average in 2004 than it had cost in 2000, but in
Euros, the price was 8 percent lower in 2004 than in 2000.

America's working families have been squeezed for most of this decade by
stagnant wages and diminishing health and retirement benefits. Now they
face new economic pressures from rising gasoline, food, heating, and
electricity prices. A portion of those higher costs are directly
attributable to the weakening of the dollar and the economic policies
that have produced a weak dollar.

Energy companies are directly benefited by a weak dollar since the value
of their domestic reserves increase in proportion to the dollars
decline. At the beginning of 2001, ExxonMobil shares traded at less than
$36 apiece. By early 2008, the share price had jumped to nearly $85. For
most of that period, the increase in ExxonMobil's share price matched
almost precisely the appreciation in the price of a barrel of crude oil.

The fall of the dollar has affected oil prices in two specific ways.

*	First, as the dollar falls against the euro and other major
currencies, oil-exporting states have been demanding more dollars per
barrel of oil to protect their ability to meet expenses paid in euros
and other currencies. 
*	Second, more recently, retirement funds, hedge funds,
speculators, and other institutional investors around the world have
tried to protect themselves against further declines in the dollar by
moving money into commodity futures that are denominated in
dollars-financial instruments that will remain stable or even rise
against other currencies even as the dollar falls. These investment
strategies create, at least temporarily, additional demand for those
commodities, driving the price upward. 

The fact that oil prices have risen nearly fivefold when measured in
dollars, but slightly less than threefold when measured in euros, would
indicate that nearly 40 percent of the increased price American
consumers are paying for oil is attributable to the weak dollar.

If only 10 percent of the price increase is attributable to the flow of
dollars and other currencies into commodities to hedge against further
weakening, then at least half of the explanation for high gas prices is
the weak dollar.

READ THE FULL REPORT WITH CHARTS HERE
<http://www.americanprogress.org/issues/2008/05/weak_dollar.html> 

About the Center for American Progress

The Center for American Progress <http://www.americanprogress.org/>  is
a nonpartisan research and educational institute dedicated to promoting
a strong, just and free America that ensures opportunity for all. We
believe that Americans are bound together by a common commitment to
these values and we aspire to ensure that our national policies reflect
these values. We work to find progressive and pragmatic solutions to
significant domestic and international problems and develop policy
proposals that foster a government that is "of the people, by the
people, and for the people."

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United States

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