The oil price, everyone tells us, is exploding upward because of…demand from Asia….fears about supply interruptions….geopolitical worries...diminishing supplies….

Maybe all those. But I blogged another explanation recently which made sense. If you are a Saudi sitting on top of a pile of dhirams pegged to the dollar and the dollar is tanking, you can’t dump your dollars in a hurry without setting off an even bigger avalanche, right?

So, what if you hiked the oil price in bucks to cover your losses and used the dollar as collateral (very illiquid) to buy up more useful assets?