Energy

What is "petrodollar recycling"?

It refers to the use of dollars for the purchase of oil and the subsequent reinvesting of those same dollars by oil exporting nations back into the US financial markets.

Many hundreds of billions of US dollars have flowed from its shores only to come back in the form of oil and purchases of Treasury and  Agency debt.

That mechanism is certainly wounded now…

While Ike was a lot less damaging than he could have been, it turns out that he did wreak enough havoc to create a severe gas shortage across the southeast.

I raise this for two reasons.

One, this can’t be helping the mood down there…running out of gas is both shocking and distinctly un-American.

Two, this just shows what happens to complex delivery networks that operate on a just-in-time delivery basis.

Inflation is caused by excess money chasing too few goods and services. A symptom of inflation is rising prices. Separating cause from effect is
very important if your goal is to understand something. Merely being
aware of something is often insufficient to take effective action(s);
it is only through understanding that specific tactics can be
properly assembled into a coherent strategy. So, let’s see if we can
move beyond awareness of rising prices and into understanding of the
causes so that we can properly prepare our portfolios, and communities,
for what’s coming next.