So, what I want to know now is how the MSM are going to treat the inflation our next president (presumably a Dem) is going to face. Are they going to blame unforseen circumstances, Bush or the Dem prez?

Somehow I’m guessing the latter, because they are soooo responsible our media.

Re: Frum & Bush conversation

Bush actually spoke so someone could understand him and he said something intelligible? I doubt it ever occurred.

Paulson was sent out this morning to serve up Kool-Aid this morning to talk about inflation being under control.

Yah, sure…the analysts on right now are working on assumption that oil is $100/bbl in 1Q2008. They are yapping right now about Chavez’ comment that oil will go to $200/bbl if US attacks Iran, and Ahmadinejad’s comment that the US dollar is a worthless piece of paper. I don’t think they are ignoring Al-Faisal at all, nothing but red downtick arrows across the board this morning.

Just realized I’ve not checked CNBC to see if they are also pulling the sheets over their heads this morning.

”Bushco may be able to keep the Iraq war going on long enough to hand it off to his putative Democratic successor in January 2009, but I don’t think that they will be able to delay… Ishmael sounds about right to me.

Though note that first article is a misinterpretation of what Faisal said. He didn’t say he wouldn’t consider it–he only said he wouldn’t do so publicly. I’m seeing this mistake in many places now.

As to Frum and Shrub–that may be one of the fwe times I’ve heard Bush address energy like that. Interesting.

Nov. 19 (Bloomberg) — Crude oil rose above $94 a barrel in New York on speculation the weakening U.S. dollar will spur demand for the commodity from buyers holding other currencies.

The dollar’s 10 percent decline this year has prompted investors to switch funds into gold, silver and oil. Saudi Arabian Foreign Minister Prince Saud Al-Faisal rejected calls by Iran and Venezuela at an OPEC summit in Riyadh to abandon the U.S. currency for oil sales, saying the kingdom doesn’t want the dollar to “collapse.’’

The falling dollar “makes oil relatively cheaper in other currencies, so it helps demand stay relatively robust,’’ said Rowan Menzies, head of research for Commodity Warrants Australia in Sydney.

Crude oil for January delivery rose as much as 97 cents, or 1 percent, to $94.81 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $94.74 at 12:31 p.m. in Singapore.

[sigh]

I once made the mistake of suggesting to Bush that he use the phrase cheap energy to describe the aims of his energy policy. He gave me a sharp, squinting look, as if he were trying to decide whether I was the very stupidest person he had heard from all day or only one of the top five. Cheap energy, he answered, was how we had got into this mess. Every year from the early 1970s until the mid-1990s, American cars burned less and less oil per mile traveled. Then in about 1995 that progress stopped. Why? He answered his own question: Because of the gas-guzzling SUV. And what had made the SUV craze possible? This time I answer. ”Um, cheap energy?” He nodded at me. Dismissed. [source: David Frum, The Right Man]

I guess he fixed that cheap energy problem, huh?

However, I don’t think it’s at all misplaced politically to notice some of the machinations around these currency meetings and the like, especially considering the not-necessarily-forward-thinking of the current occupants here. What with falafel-eating as the mark of terrorists, who knows? Sabre-rattling over a currency board would be downright sensible by comparison.

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I’d sure love to hear some of the banter between Brady and Cassell.

Come to think of it, it’s probably just banter from Brady to Cassell, or within Cassell’s earshot, or something … kind of like Jordan, ice bags on his knees, glowering from the bench ”All right now, don’t make me have to come back in …”

Nope. No punts–not till Cassell came in, anyway. And thanks for the link–that makes a lot more sense and is not so simplistic as I was making it.

I understand the need for the Gulf countries to try reach consensus so they can move together, but I am not sure that countries with open capital markets can announce that they are considering a revaluation on a fixed data without effectively being forced to revalue.

My bold. The point being that the minute traders get the idea that they know what a new policy will be, they tend to get ahead of it. In this case, Setser says they might bid up the Gulf currencies to the point that the countries can’t defend the dollar peg at the old rate, so that a revaluation that might have been future or hypothetical, becomes a reality. Of course, the leak would tend to work in just the direction of forcing the GCC hand.

NB: Setser does not seem to think that any of the countries wants to dump the dollar; that wouldn’t get them anywhere, even financially, as they’d only get less in exchange than they would just by being patient enough to effect an orderly unwind, which could take weeks or months. However, some might want to move sooner than do the Saudis toward some kind of market basket policy, i.e. holding reserves and pricing their own currencies against an average of several, rather than just the dollar. That would constitute an abandonment of the peg, or the fixing of their exchange rates to the dollar, but would not be implemented by a dump.

Setser suggests that the source of a difference of opinion might be in the countries’ domestic economic positions, as much or more than in their policies toward the U.S. (Just possibly, it’s not always about us, though where the Gulf is concerned, skepticism on that point is justified.)

Here’s an article that Setser links to, with some more reporting from the GCC meeting and more recent history of countries that have moved away from the dollar. I personally am not yet convinced that this issue is more serious than our domestic credit market problems and the tremendous reputational hit as a source of expert and reasonably honest financial management we’re taking because of it, not to mention a host of real economy and public sector vultures coming home to roost, but we’ll see.

The Pat’s offense is a horrifying thing this year. NE 42 BUF 7 early 3rd. The NE starting offense might not have to punt in this game.