US $ will eventually slideIN THE US THE FIRST REACTION IS USUALLY THE WRONG ONE('oil prices can't stay this high'). For ex. 1. analysts who were/are using $35-45$ oil in their cost predictions still don't understand the market forces. The only things that will cause oil price to drop drastically imho are: no demand (domestic as well as China & India), benign weather, no news (political, distruptions in refining, terrorism); 2. CNN---usually the first on the scene of any disaster, but with the wrong analysis (Hurricane Katrina not as bad). Actually it is by all accounts worse. Major supply pipeline down, LOOP out of commission (only port in the US that can handle supertankers), at least 2 oil platforms washed away & one in drydock being repaired breaks its moorings & smashes into & almost severed in half a major bridge in Louisiana, oil storage tanks surrounded by water with one having its roof smashed in revealing th oil inside from what I saw, passageway in the port channel closed for 'many, many days', 9 refineries with no power. Not to mention no potable water, no air conditioning, no power etc..
IMHO---this mess (Oil industry) will take till the end of the year at least to get back to normal. During this time the peak driving demand for gas will have passed, but demand for fuel oil for heating will be increasing. Will supply be able to keep up! I doubt it. This is a DEFINING moment in the US economy. This may be the straw that breaks the camels back. The accumulating weight of all the problems with the US & its economy---twin deficits, oil prices, war costs, trade problems will prove too much for the US$. Then Gold will rise.
carlos