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Cacique's Recomended Reading List for week of November 12, 2007
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Posted on 11/17/2007 3:16:53 AM PST by SkyPilot
The dollar could collapse if Opec officially admits considering changing the pricing of oil into alternative currencies such as the euro, the Saudi Arabian foreign minister has warned.
Prince Saud Al-Faisal was overheard ruling out a proposal from Iran and Venezuela to discuss pricing crude in a private meeting at the oil cartel's conference.
In an embarrassing blunder at the meeting in Riyadh, ministers' microphones were not cut off during a key closed meeting, and Prince Al-Faisal was heard saying: "My feeling is that the mere mention that the Opec countries are studying the issue of the dollar is itself going to have an impact that endangers the interests of the countries. "There will be journalists who will seize on this point and we don't want the dollar to collapse instead of doing something good for Opec."
After around 40 minutes press officials cut off the feed, which had been accidentally broadcast to the press room.
Prince Al-Faisal added: "This is not new. We have done this in the past: decide to study something without putting down on paper that we are going to study it so that we avoid any implication that will bring adverse effects on our countries' finances."
Iran and Venezuela have argued that the meeting's final communique should voice concern about the level of the dollar, which has recently fallen to new record lows against the euro. They are pushing for oil to be denominated against a basket of currencies.
The greenback also weakened slightly against the pound, although sterling's own recent weakness has pushed it down from $2.10 to $2.0457 during the week.
Nigerian finance minister Shamsuddeen Usman said that Opec could declare in the communique that: "While underlining our concern for the continued depreciation of the dollar and its adverse impact on our revenues, we instruct our finance ministers to study the issue exhaustively and advise us on ways to safeguard the purchasing power of our revenues, of our members' revenues."
Chancellor Alistair Darling will today urge his fellow finance ministers at a major G20 summit to increase investment in oil production and refinement.
It is our own government’s policies that is bringing down the dollar. Those policies are:
1. Running huge government budget deficits.
2. Running huge trade deficits.
3. Allowing the Federal Reserve to increase the money supply at double digit rate for years.”
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Nail on head.
Please note:
From: “When dollar falls, European exporters count their bruises” at: http://www.freerepublic.com/focus/f-news/1927222/posts
“The euro’s rise and dollar’s slide are squeezing European exporters’ profits or multiplying their losses, prompting layoffs and plant closings. Companies are not only curbing production of goods headed to U.S. buyers but also rethinking the way they do business.”
“The strong British pound, moribund Japanese yen and undervalued Chinese yuan also play roles in this tale of currency chaos, from a European exporter’s perspective. Nearly every day, another company announces more lost earnings and job cuts and blames the currency commotion.”
The fact is that international politics, not economics, not the underlying performance of economies (US vs EU) has bid up the Euro. Let the Saudis bid it up higher - then watch it crash when EU-denominated manufacturing is dead.
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Cacique's Recomended Reading List for week of November 12, 2007
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I worry about another angle.
We have a national debt of over 9 trillion dollars. At current interest rates, we spend over 400 billion a year financing this debt (about the same size as the military budget).
Many overseas investors buying these US Treasury's are losing money. They would be better off hiding their money under the mattress.
If the US dollar loses "Safe Haven" status, we will have to pay higher interest for financing, which could easily double our debt payments, which causes us to borrow more, which further strains our ability to borrow, which ...
ANWR was killrd by
bill
ANWR was killed by Bill Clinton - passed by both houses and vetoed by the billster.
SO when you start paying 4+ USD per gallon, and you will, remeber to thank the Clintons.
clinton
That’s not going to happen; we would effectively lose our sovereignty.
We survived that type of inflation during the seventies. That’s not to say it was a good thing, but we survived.
It was a huge transfer of wealth from the States to third-world countries and the Middle East. And it was a capital levy on the savings of our people. The dollar experienced fivefold, possibly sixfold inflation from 1967 to 1982.
My aunt and grandmother believed the old bromides about savings bonds. "It's safe with the United States Government, and you'll always get your money back." After they both died in 1981/2 (a couple of months apart), some of the family (cousins) finally opened the safety-deposit box they had, and found about $35,000 face value of war bonds and assorted series of savings bonds. One of the cousins, a woman, realized what they had done, and wept. Thirty-five large in 1950 dollars would have been worth $350,000 in 1997. It would have been worth about a quarter-mill in 1982.
They didn't know what they had, and they didn't know how to protect it from men they not only admired but almost revered.
Who turned around and did that to them, as "policy".
In such circumstances, "survived" is almost a term of art. "Staggered out of the bushes, beaten and robbed" would be closer to it.
Here’s a crazy notion: Balance the federal budget. Pay down the national debt.
sounds like that old movie called “rollover”
Of course keep in mind “they” thought 9/11 (and pearl harbor) would cause the USA to instantly surrender.
Was this one of those super duper veto's that prevents the legislation from never ever ever being brought up again?
Not enough votes to override the veto and the bill expires with the session. Cicics 101 - we got boned.
Now that Congress is riddled with RINOs and Greenies, nothing has come close to passing in the time since. The Dems are actively working to ban drilling there - period. I guess-ti-mate the current north slope is good for a dozen more years - maybe. We are losing production at about 6 to 10% per year, you can do the math.
One has to ask who the heck these loons are actually working for - it sure as Cane ain’t for us.....
I am looking for a wood stove to supliment my heating. I would hate to freeze to death as an old man.
As for the grandkids, I suppose they can always migrate to where the work is at the time.
Energy independence now. We have the Saudis, Venezuela, Iran, and China threatening to collapse our economy. It’s time to remove from them the ability to do this my making our own energy and spending within our means.
Even though the Republicans held the House, Senate and Presidency (after 9/11, which to me seemed to make energy Independence from the Islamofascists even more important) ANWR drilling was not approved.
At least we can still blame Clinton.
To do that, we would have to throttle back (a lot) on Social Security, MEDICARE, and MEDICADE.
Those programs eat up the majority, by far, of the Federal Budget.
Defense?
A paltry 3.4% of GNP. During WW II, it was 38.9%. During Korea, it was 20%. During Vietnam, 16.5%.
Who here thinks Congress will scale back on SS, MEDICARE, and MEDICADE? A show of hands please?
This chart isn't even accurate. The spending for non-defense is off the chart scale!
You mean a currency like the AMERO?
It is coming. Mark my words.
Ah, RINO does not = Republican.
Control does not equal passage of everything.
My point, ANWR was approved once and Kilton killed it. Nothing close since then.
Take it as you wish.
Jim Stack of Investech Market Analyst once showed from market records that sentiment can be "right" for a long time, at the start of a large move. His case in point was the 1973 bone-grinder, "frog boiler" bear market. Sentiment turned negative early in 1973, and so did the Dow. Sentiment stayed negative all the way into the late-'74 final collapse two weeks before Christmas. Anyone playing contrarian sentiment and jumping onto the Dow and S&P had a long wait for a turnaround.
Anyone who waited and actually did pick the December '74 bottom, or picked the rally off bottom using crossover techniques, made a lot of money in the 1975 rebound. That's not counting any additional gains he might have had timing intermediate-sized swings in the sideways market of the late 70's and 1980-81.
Anyone putting money into Vanguard Explorer, Fidelity Magellan, or T. Rowe Price New Horizons funds and similar aggressive-growth/max capital gains mutual funds near the bottom got a triple by the time the bear market finally ended in 1982, if he just bought the bottom and held -- so I discovered, looking through Wiesenberger's Investment Results in 1982/3.
The dollar is ready for such a large move. It's probably oversold and ready for a bear-market correction, but the Fed has already demonstrated that they've no stomach for defending the dollar at the expense of high unemployment and a deflation of securities. On the contrary, the Fed and Treasury have been acting under Presidential directive since 2002 to defend the securities markets as a national-security interest:
ttp://sprott.com/pdf/pressrelease/TheVisibleHand.pdf
When the dollar does begin to correct, so will gold, esp. when the dollar crosses its 7-week exponential moving average (EMA), which is the technical sell signal for gold. But longer term, the dollar is bearish and gold is still mega-bullish. You'll know the move is over when shoeshine boys and night cooks are buying K-rand and Warren Buffett starts to sell down Berkshire Hathaway's positions in overseas securities and repatriate his winnings.
"Swindling and barren gains" -- lol, he could have been talking about Alan the Gargoyle and Shady Ben and their buddies in the gold cartel and Plunge Group. "The boys downtown" is what Paul Newman called those kinds of guys, in The Verdict.
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