As oil and gasoline prices rose throughout much of this decade, a popular media meme was that a lower dollar was largely to blame.

By making this dubious connection, press outlets could point fingers at Bush economic policies thereby distracting the public from the reality that decades of liberal environmental constraints on oil exploration and refinery construction led to an inevitable and undesirable supply-demand squeeze culminating in the commodity futures bubble that peaked in July.

Yet, since early November, oil and the dollar have both been plummeting thereby destroying the press assertion that as one goes down, the other goes up (charts courtesy TradingCharts.com):

As can be seen by the above charts, through Thursday's close, oil is down almost 50 percent since Election Day, while the dollar is down about ten percent.

If a declining dollar causes oil prices to rise, how could a ten percent drop in the former lead to a 50 percent drop in the latter?

I'd love to hear Nobel Laureate Paul Krugman's answer to that!

In the end, there were a number of factors that created the energy/commodity futures bubble this decade including of course supply and demand. Yet, maybe even more important was the extraordinary leverage involved in futures contracts AND speculation.

Compare the following oil chart...

...to this NASDAQ chart (courtesy BigCharts.com):

See any similarity?

As NewsBusters readers are aware, I have been stating for several years that oil was a bubble waiting to burst, and that commodities firms along with a Bush-hating media continually pumped air into the balloon by over-emphasizing the increasing demand from China as well as a plummeting dollar. 

As the past two months demonstrate, there is no definitive causal relationship between a declining dollar and rising oil prices. In fact, as I have argued before the greater likelihood is that it was rising oil prices during this bubble that forced down the dollar as traders from all over the world shorted the U.S. currency to fund purchases of crude.

As the bubble burst in July, traders that were long oil and short dollars needed to liquidate both positions causing oil to plummet and the dollar to rally. As those reciprocal positions have now largely been unwound, oil and the dollar appear to now be trading on their own fundamentals whereby the former is declining due to obvious reductions in international demand as a result of the recession, and the latter is dropping as our interest rates declined to virtually the lowest of any industrialized nation on the planet.

With this action, the media meme that it was Bush economic policies and a weak dollar that forced oil prices higher has finally been debunked. 

In the coming years with a new president in the White House it's going to be fascinating to watch how many other Bush Derangement Syndrome media memes similarly explode with little fanfare from press members that either ignorantly or disingenuously espoused and disseminated them.

I can't wait to help expose them!

—Noel Sheppard is the Associate Editor of NewsBusters. Follow him at Facebook and Twitter.