Our contributor Dennis Svakis traces the bigger issues of the DPW deal roadblock on investment decisions, currency value, and economic health at Constitution Alley. A thought—provoking piece. Here's a sample:
The price of crude oil has already risen substantially over the past three—plus years. At the end of November, 2002, the dollar and euro were at parity and the price of a barrel of crude was $23.32. By mid—February of last year the price of crude was $39.59 per barrel, but the euro price was only 30.77. That's a 28.7 percent premium for dollar oil over the price in euros. Today the dollar is worth 0.8390 euros, crude oil is at about $60 per barrel, and so the euro price would be about $50 per barrel. We are thus still paying a 20 percent premium for crude over the price our European cousins do. They of course pay much higher price for refined fuels but that is mostly a function of taxes and not obscene windfall profits by big oil companies.
Restricting investment by those foreigners holding petrol—dollars could go a long way towards further increasing the price of crude oil through additional reduction in the value of the dollar. If we can't trust those who accept our money for their goods, then we'd better stop asking them accept our dollars.