Hedge

[PullUp]

Part of the oil price inflation problem is the devaluation of the dollar. The Fed keeps printing and printing, and the value keeps decreasing. Then when you go to buy a non-dollar denominated item like oil (or other imported goods) you pay more worthless dollars for the same amount you used to get for less.
The solution is to charge more dollars for your product if you must used foreign (expensive) goods.

 

[BoeingBoy]

Then when you go to buy a non-dollar denominated item like oil...

Oil is denominated in dollars. The effect is what you said when the dollar is weaker - other countries can pay more in dollar equivalents without raising the price in their currency.

Jim

 

[Barrister]

A little perplexed at your statement of "fear mongering", more appropriate would be "global rationalization" one has to only look around to the emerging nations in this world and relize, we aint one of them! OIL a finite resource, will go to the highest bidder and those with the ABILITY to pay! INDIA, CHINA, etc etc, those with the resource produciing it using it will flourish, those importing it are subject to the whim of the seller and all the economic fallout, ie the US and especially the US airlines! MM! Thanx for posting those articles!

Sorry MM gotta go against you here. Oil went from 140 to 33 and China DID NOT break off and fall into the sea.
It is pure speculation that drives oil north of 50-70 per barrell.

NICDOA
NPJB

 

[MUTATIS MUTANDIS]

Sorry MM gotta go against you here. Oil went from 140 to 33 and China DID NOT break off and fall into the sea.
It is pure speculation that drives oil north of 50-70 per barrell.

NICDOA
NPJB

But then again look at china's currency and the problem govts have with it! Like the stockmarket my guess oil will be THE GLOBAL FACTOR of 2011! But then again "THE GREAT WALL" is still standin.! MM But regardless when you don't hedge your cost factors are an unknown, zero or hero, pun intended, very little margin!