Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Up to the creation of the euro and arguably beyond - let's say up to some arbitrary psychological point where the euro looked (not any more) like it was ready to be "the new reserve currency" (2007 perhaps?) then there was no serious option for oil producers to price in anything but dollars.

Further, the Chinese economy, as a prime manufacturing site currently organised around importing large volumes of raw materials to feed the factories is (% wise) much more vulnerable than the US to cost-push.

Of course this gets complicated because how much of the "cost-push" in China gets passed on to the US because you can't change the mix of US-China trade that quickly (lots of trade internal to companies).

by Metatone (metatone [a|t] gmail (dot) com) on Wed Jun 9th, 2010 at 04:25:23 AM EST
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