Oil shocks and exchange rates

Some FRB researchers have a partial solution to exchange rate puzzle.  Exchange rates change via commodity shocks.  Here is the USA, green is oil, the other two are exchange rates.  They move mostly opposite.



What does this tell us?  We suffered an oil shock in 2008 as we can see from the exchange rate fluctuations.  The dollar collapsed due to the oil shock, the terms of trade favored exports, and we suffered domestic bubble due to price hikes.  It was oil shock, start to finish, housing was a symptom.  The economists pick the theory that required stimulus, they picked it on purpose without any real thought.

We can see the stimulus we attempted just drove oil prices back up, the answer we get for supply shocks. It was not until we got going with the frackers that we get back to normal. Note the  correlation, or anti-correlation was solid from 2000 until today, really.  Whoever started the whole 'housing caused the problem' caused a lot of wasted effort and time.

For years we had to deal with economists who refused to look at charts for fear they would observed a supply shock.  It was a scam, deliberately hiding the oil shock, and I remember when it happened.  Jim pointed to the chart above, and Brad almost believed in the supply shock.  But the e mails and talking points among the progressives took hold and they would not give up their cherry stimulus.  That is what turned me off to the Kenysians, you never got them to look at data unless they check with their tribe and coordinated the talking points, not science, sickness.

Look at the stimulus:

The stimulus took off in 2010, but oil prices had already slammed down, the dollar was back up; the recession over, and back to the secstags. All the horse manure about the effective stimulus was just that , horse manure. All the parties should have known, the Keyensians went to the Swamp and lied, and Obama bought into the horse manure, for a while. All this know, all his censored by the keynesians in power at the time, pure fraud.