Newbe here trying to put the pieces together. I have read many threads and tried to put it together myself but these questions linger. Where is my thought process incorrect?
The oil price has drastic effects on international economies. Many European countries are more fragile to the rise in oil prices and the subsequent rise in imports that are affected by these increases. The US has far more leverage to offset the differences with our own resources i.e manufacturing, domestic oil drilling and etc. When the dependancy on other countries imports is strained by the cost, the tendancy is to switch back to domestic manufacturers for the countries supplies. With an increase in oil drilling from-and only-for, domestic sales, the price per barrel can be decreased for the US.
With a strong dollar policy, doing domestic manufacturing and sales has cost soo much many large companies are still falling with the dominoe effect from years before. Not the same, but similar, is the effects of manufacturing in California. Where are they going to? other states.
Are more than half of the imports into this country American companies, paying for the manufacturing offshore, and selling back to Americans? The tax and profit of the sales are largely withheld in the states through sales tax, import taxes, transportation and etc.
The Euro and thier respective countries are not praising the rise of the currency. They are well aware of thier venerable position when being influenced from foriegn currencies. They are concerned over the current Bush administrations DELIBERATE/ALLOWED fall of the dollar. They know where they stand to lose if we keep dropping and they keep rising. With the constriction on thier manufacturing and exports from the inflated value, thier domestic problems like unemployment an inflation will surface and could topple administrations. Thier infrastructure is not near that of the US.
Wasn't this country was born to its superpower status WHEN THE DOLLAR WASN"T EVEN THE TOP CURRENCY.. the Sterling was?