Recycling the Petrodollar Tsunami

As discussed in prior issues, oil prices have risen dramatically in recent years as real demand growth has outstripped new supplies. Also, in commodities markets, geopolitical tensions have created an enormous “anxiety premium.” Consequently, there’s been a huge transfer of wealth from industrialized countries to oil-producing nations. Since the excess dollars can’t be eaten, driven, or worn, the oil profits have to be spent or invested. What threats and opportunities will the current petrodollar situation generate for managers, investors, and Americans in general? We’.....