Oil, gold and Strauss-Kahn

Our list of factors affecting oil and gas prices already includes war, kidnapping, supply and demand, hurricanes, pipeline explosions and threats to tyrants. Add sexual assault. Dominique Strauss-Kahn’s arrest for allegedly assaulting a maid at the Sofitel in Manhattan is causing havoc not just in oil markets — gold, currencies, and Asian stocks are all ...

Thomas Coex  AFP/Getty Images
Thomas Coex AFP/Getty Images
Thomas Coex AFP/Getty Images

Our list of factors affecting oil and gas prices already includes war, kidnapping, supply and demand, hurricanes, pipeline explosions and threats to tyrants. Add sexual assault.

Our list of factors affecting oil and gas prices already includes war, kidnapping, supply and demand, hurricanes, pipeline explosions and threats to tyrants. Add sexual assault.

Dominique Strauss-Kahn’s arrest for allegedly assaulting a maid at the Sofitel in Manhattan is causing havoc not just in oil marketsgold, currencies, and Asian stocks are all in a kerfuffle. Oil dropped below $98 a barrel; gold fell by $3 an ounce, and silver declined, too; the Euro plunged to a seven-week low against the dollar.

The stated reason is that the 62-year-old chief of the International Monetary Fund was supposed to swoop into Brussels today and tomorrow and help figure out how debt-laden European countries might get bailed out before seriously injuring the economies of the European Union. But why should that be the case since Strauss-Kahn’s superlatively able deputy, John Lipsky — who also has been named as the IMF’s interim chief after the arrest — has stepped in to the breach?

Is this a normal reaction? Out of curiosity, I Googled "sex scandal shakes market." There were 1,220,000 hits, including accusations against lifeguards in Florida ("Sex Scandal Shakes Volusia Beach Patrol"); a 1976 scandal involving then-Rep. Wayne Hays and a long-forgotten clerk named Elizabeth Ray ("Sex Scandal Shakes up Washington"); a sex tape that rattled Turkish politics ("Sex Scandal Shake-Up Reinvigorates Turkish Opposition Party"); and a two-decade-long controversy involving an Indian dessert shop ("Ice Cream Parlour Sex Scandal Returns To Shake Kerala Govt").

This unscientific survey turned up no immediately noticeable direct link between sexual assault and the markets. I was certain that the Monica Lewinsky case must have rattled markets in the mid-1990s — and readers may recall better than I — but had no luck with that specific search, either.

Curiosity aside, the Strauss-Kahn case is a wake-up call for those who do not yet realize that we are in a highly jittery moment, and perhaps on the edge of a new global economic dip. Read this piece by John Authers at the Financial Times.

<p> Steve LeVine is a contributing editor at Foreign Policy, a Schwartz Fellow at the New America Foundation, and author of The Oil and the Glory. </p>

More from Foreign Policy

Children are hooked up to IV drips on the stairs at a children's hospital in Beijing.
Children are hooked up to IV drips on the stairs at a children's hospital in Beijing.

Chinese Hospitals Are Housing Another Deadly Outbreak

Authorities are covering up the spread of antibiotic-resistant pneumonia.

Henry Kissinger during an interview in Washington in August 1980.
Henry Kissinger during an interview in Washington in August 1980.

Henry Kissinger, Colossus on the World Stage

The late statesman was a master of realpolitik—whom some regarded as a war criminal.

A Ukrainian soldier in helmet and fatigues holds a cell phone and looks up at the night sky as an explosion lights up the horizon behind him.
A Ukrainian soldier in helmet and fatigues holds a cell phone and looks up at the night sky as an explosion lights up the horizon behind him.

The West’s False Choice in Ukraine

The crossroads is not between war and compromise, but between victory and defeat.

Illustrated portraits of Reps. MIke Gallagher, right, and Raja Krishnamoorthi
Illustrated portraits of Reps. MIke Gallagher, right, and Raja Krishnamoorthi

The Masterminds

Washington wants to get tough on China, and the leaders of the House China Committee are in the driver’s seat.