Re: Prayin' for a warm Winter

[Peter Dorman <dormanp@xxxxxxxxxxxxx>]

One thing to bear in mind is that price increases for petroleum translate into
greater US current account deficits.  Our short-run price elasticity of demand
is practically zilch, and it is not inconceivable that a further price spike
could pop our infamous "double bubble" (asset markets, the dollar) and
necessitate emergency action by the world's central banks.  (Capital flight,
foreign exchange crisis, coordinated decision to absorb dollars as foreign
reserves.)  How likely is this scenario?

Peter

Lisa & Ian Murray wrote:

> Paris, Wednesday, September 13, 2000
> Wider Cost Of Oil Rise: Chaos for Economies
> By William Drozdiak Washington Post Service