Tonight on Kudlow and Co., the panel debated whether or not the Fed should raise rates and whether it would help or hurt the economy. The classical opinion was that by raising rates, consumers will be squeezed further. The other argument (one to which I subscribe) is that, consumers aren't borrowing and banks aren't lending and that by keeping rates low, all that is being accomplished is that the dollar weakens and consumers get squeezed by higher food and energy prices.
It seems that there is a group of people who insist that higher energy prices have nothing to do with the weaker dollar (in spite of all the data which say otherwise). I can't decide whether these people have a political agenda or are just stupid. We hope it is the latter. Bottom line is that, if the dollar strengthens, oil prices will fall, at least to some extent. Let's hope that the powers that be come to their sense soon. Maybe we will even drill for domestic oil. what can I say? I dream big.
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