Oil price and real inflation

 

The implicit inflation is influenced by imports. Our importers want low oil prices from Texas and high export prices to the USA.

But they have a dilemma. Domestic oil consumption look better to us relative to import prices.  Further, the petrodollar managers have largely left the US bond market and lost a lot of leverage.

Right now the best bet for the petrodollar users is leave well enough alone. But I doubt this monetary standard will hold up for long.  I have become stumped about the next move. Maybe the best move is to let the Fed continue to raise the domestic VAT tax to keep domestic oil usage down while import prices keep rising. But even that has a short life as Texas suffers the cost of import price hikes.