Government deficits and oil prices

From the Financial Times......"For decades Washington has seen oil as an issue of national security, worrying that a rogue Middle East country would withhold America’s lifeblood as Arab countries did during the 1973 oil embargo.

Now US and European politicians are linking oil – and record food prices – to a new international strategic threat: instability in developing countries.

During the past few weeks senior officials have quietly begun to shift their emphasis of the fuel and food crisis from viewing it as purely a humanitarian and social problem to a concern that governments could fall as hungry and fuel-deprived people take their anger to the streets."

Our leaders should concentrate more on the level of government spending and the easy monetary policy central banks are forced to follow to finance these deficits. This is what is creating soaring commodities and rising inflation around the world.

The politicians are saying: It's not us, it's their fault. Shame!

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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977