In case you missed it, House Speaker John Boehner’s intraday comments yesterday mattered to the market. A lot. His (highly questionable) decision to support a strike on Syria spooked investors and sent what was a promising stock rally into the tank.
Why? Two words: Oil prices.
Boehner stoked the flames of fear to the number one economic risk we currently face here in the United States. It’s called an Oil Tax at the pump. In other words, Boehner painted a bull’s-eye on what has been strong, recent US consumption growth.
The fact is that weakness in the greenback pushes prices for oil and other dollar-denominated commodities higher. All of this uncertainty over Syria has driven oil prices to fresh highs in recent weeks. Over the past month alone, the price of Brent crude oil has risen five dollars to $115 a barrel. Boehner basically poured a barrel of gas on the flames.
Bad for growth. Bad for consumers. Bad for America.
And guess what? Vladimir Putin likes it.
Now, I don’t know about you, but I’ve about had it with Putin.
Here’s a novel thought: The best way for President Obama to pulverize Mr. Putin in St. Petersburg this week would be to stick a weapon of “Mass Currency Appreciation” in his grill. You want to get Mr. Putin’s attention? Obama should channel Clint Eastwood and make Putin eat a strong U.S. Dollar. Shove it down his throat.
Look, if I was advising the President, I would have him hide a #StrongDollar ace up his sleeve at the G-20 poker table – and maybe say something like this:
“Hey Vlad. We’ve had it with you. We’ve had it with your bluster. So, let me tell you what I’m going to do if you don’t tone it down. First, I am going to taper. Big-time. Then I’m going to tighten. And if you don’t think I can get Larry Summers to do it, you just go ahead and try me. Your little Petro-Dollar power problem will look like Fukushima. Fast.”
But that’s just me – I’m a doer type of a guy. I like to make decisions without asking the weak-kneed bureaucracy of the world for its opinion. And I sure as hell don’t like to watch second-rate dictators shove it in America’s face. We are better than that. Bullies like Putin need to be broken.
It’s time. We desperately need a US President to get solidly behind and build a #StrongDollar. Not just with words, we’ve had enough of that over the years. I’m talking action. Big action. Bold action. Strong America revolution on the back of your hard earned currency.