How often do we hear that this currency as the culprit of the m.o. of everything that the "sophisticated" types think is happening. It is almost conspiratorial:
- the Fed raises rates;
- commodity prices come in because they are a hedge against the weak dollar;
- oil fluctuates in price because of the dollar;
- the dollar controls stocks and bonds.
But the dollar and oil? Okay, I hear the intellectuals, but how about the empiricals: oil went from $119 to $148 while the dollar was steady against the Euro. Do the facts matter? What happens if they get in the way of the intellectuals' stories.
How about the supply and demand factors and how quickly oil fell off in production this year. You should all read the Washington Post series about supply and demand that is going on right now. Believe me it is not about the dollar, it is about an inability to find and an inability to drill and a run out of oil from Mexico and the third world subsidies.
It is about the lack of rigs manufactured by National Oilwell Varco (NYSE: NOV) (Cramer's Take) because of the low price of crude in the '90s. And it is about a deep-water rig shortage:
That's why I like Transocean (NYSE: RIG) (Cramer's Take). It never mentions the dollar. Are the journalists "unsophisticated" or are they actually looking at the facts?
Or how about the budget deficit. One look at the midnight increase in the authorization of the budget debt increases tells you more about the dollar than about Ben Bernanke.
We are seeing a tremendous increase in the printing presses coming courtesy of Iraq and Fannie Mae (NYSE: FNM) (Cramer's Take) and Freddie Mac (NYSE: FRE) (Cramer's Take) and the FHA. But the intellectuals don't think it: they think it is controlled by Bernanke.
This nonsense is all classic misdirection. Do you really think that the collapse in natural gas is related to "tough talk" by fed governors and not the higher inventories with no place to put the stuff. Remember those inventories are controlled domestically and there has been the wrong weather patterns for its use and the storage places are sorely lacking.
I hate to criticize others about this lack of a link -- including people on the site -- but I await a definitive sign that supply and demand don't control the price of crude. I have seen none and this is a remarkable disconnect.
Random musings: No, not blaming the short sellers -- lots of bad companies out there. I just want the rules to be enforced.
Global Economy Still Rocky
All You Need to Know About Oil
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.