Soaring oil prices are the real problem

IT has gone virtually unnoticed that rising oil prices and a weak dollar have been running in tandem for some time.

Some economists attribute the dollar weakness to the serious deficits in the US. Others blame the decision by the Federal Reserve not to underpin the currency due to the need for the biggest economy in the world to stop living beyond its means.

Last year, the US spent more than $600 billion than it earned. If that’s not living beyond your means then I don’t know what it takes to justify such a claim. It was made recently by Kenneth Rogoff, professor of public policy at Harvard University.