We’ve talked about the petrodollar before. Oil is priced primarily in US dollars. When the dollar goes down the price of gas goes up.
Want lower prices at the pump? Restore sound money. So long as we don’t address the fundamental dollar/oil link issue we can “drill baby drill” all we want. It’s unlikely to have much long term effect on the price at the pump.
(From The New York Sun)
In other words, it’s not the gasoline that’s been going up. It’s the dollar that’s been going down. Americans, however, don’t hold their money in gold or silver. They generally hold their money in accounts denominated in dollars, and the dollar has been getting weaker. It is the view of the Sun that this fact lies at the bottom of the grim feeling that has swept the country under President Obama, the lingering sense that we are falling behind. We are all for energy policies that maximize the incentives to explore and produce our own oil and gas. But the it’s not going to bring relief to the misery Americans have felt during the Obama presidency until a restoration of sound money.