Gold bars at the Tanaka Kikinzoku store in Tokyo, Japan, Gold futures traded near their highest, bucking the trend Photo: BLOOMBERG NEWS
Posted on 10/06/2008 11:10:18 PM PDT by TigerLikesRooster
Russia and Brazil crumble as commodity prices crash
The entire complex of commodities and emerging market stocks, bonds, and currencies is now in free-fall as the economic crisis spreads like brushfire, threatening to draw every corner of the globe into the vortex of recession.
By Ambrose Evans-Pritchard
Last Updated: 7:00AM BST 07 Oct 2008
Oil, grains, and industrial metals all crumbled as the week began despite the passage of the Paulson bail-out plan in Washington and dramatic moves by European governments to shore up their banking systems, compounding the steepest commodity crash in over half a century.
The big exception yesterday was gold, which surged $34 to $864 an ounce on safe-haven buying as the markets came face to face with the unsettling reality that the euro is no healthier than the dollar, and perhaps sicker.
The euro’s dramatic slide over the past two weeks has for the first time exposed the instability of the twin-pillar system holding up global finance.
Hans Redeker, currency chief at BNP Paribas, said investors fear that no one is in charge of Europe’s monetary union. “Who is Mr Europe? What is his telephone number? There is no such thing. We have a cancer eating at the system because even healthy companies cannot roll over their debts, yet the politicians still don’t understand the risk,” he said.
(Excerpt) Read more at telegraph.co.uk ...
Gold bars at the Tanaka Kikinzoku store in Tokyo, Japan, Gold futures traded near their highest, bucking the trend Photo: BLOOMBERG NEWS
Ping!
Russia, Venezuela and Iran have all said independently that oil needs to stay above $90/barrel. This is interesting because without the U.S. paying that level of dollars to these rogue nation, they will have a hard time finding the capital to wage an axis against the U. S.
In other words, they need us to buy their oil at high prices so they can mount coordinated threats against us. What a sick, sick world we live in.
Russia to Venezuela: “Would you be interested in buying a nuclear powered cruiser? Used very little. Spent most of the decade in port.”
Ambrose Evans-Pritchar .....
The same guy who famously wrote yesterday that only those with “gold bars” would survive the derivatives meltdown
It was ironic that rich countries were in crisis and developing countries were sustaining global growth, said Brazil's President Luiz Inacio Lula da Silva. "We did our homework and they did not," Lula said during a joint news conference with Chavez.
The U.S. Crisis and Latin America - October 06, 2008 - What a change a few weeks can make. A little over two weeks ago - on September 19 - Brazil's president Luiz Inacio Lula da Silva was asked about the potential impact on his country - Latin America's largest - of the growing U.S. crisis. "People ask me about the crisis, and I answer, go ask Bush," Lula said. "It is his crisis, not mine."
Fueled by hedge funds unwinding to meet cascading margin calls. Die hedge funds die!
Amazing how America got along perfectly well without any derivatives and without any scummy hedge funds and we'll soon be doing it again. Might take a few years. The degenerate hedgers & speculators have tapped out all their credit lines. Easy credit (blame Ayn Rand hippie Alan Greenspan) was the hedgers best friend
There is no more easy credit. Nowhere on planet earth
New fleet may mean U.S. covets Brazil's oil: Lula - Sep 18, 2008 - Brazilian President Luiz Inacio Lula da Silva warned on Thursday that the resurrection of a U.S. naval fleet in Latin America may signal that Washington covets huge new oil reserves off Brazil's coast.
"The Navy plays an important role in protecting our subsalt reserves, because the men of Fourth Fleet are almost there on top of the subsalt areas," Lula said in a speech inaugurating a new oil platform in southern Brazil. "Our Navy has to be the guardian of our offshore oil platforms to protect our patrimony, because before you know it some wise guy will come along and say: 'This is mine, it's at the bottom of the ocean anyway, so it's mine.'"
Just last week, Brazil deployed warships, fighter jets and thousands of troops off its southern coast, starting two weeks of military maneuvers aimed at showing the world it can defend its newfound oil wealth. Brazil is also negotiating a strategic defense alliance with France that would include the construction of a nuclear-powered submarine to patrol its oil-rich waters.
This coca leave chewing moron is pumping out his oil in a way that is destroying the long term yield
Oil should keep going down and make him sweat
Go down more and Venezuelans riot (that's how they vote there) and get rid of Hugo once and for all Ceausescu style
$50 of the oil price was speculation, mostly by rat bastard hedge funds
In terms of Brazil, at least with their national energy issue, they will be able to weather the coming economic storms some what better then most nations through the use of cane sugar derived ethanol.
Uh, Dennis, you do know that Greenspan was a hard money guy when he was with Rand (as was Ayn herself). He is a key example of Acton’s dictum of absolute power, albeit absolute power made him stupid as well.
I was (seriously) contemplating a move to Brazil not too long ago. Yes, I knew that when commodities went crashing, that Brazil would go down with them. Nevertheless, they have diversified considerably over the past 15 years, and are not as dependent on imports of essential goods, so a fall in the real won’t hit them as hard as many will think.
Alan Greenspan started as hard money gold bug and finished as laissez faire extremist running the Federal Reserve like a hippie commune (Bill Fleckenstein’s words)
Different lifestyle, certainly. Different regard for life from the government down, too.
Brazil still has problems with crime, corruption (largely at the local, rather than the national level), a disparity in wealth between regions, etc. Nevertheless, it is no longer the basket case that it was in the 60s-early 90s.
Dr. Milton Friedman said the Euro would not last past Europe’s first big recession and this is why. it will be every man (country) for themselves, breaking it apart.
You can't just force them into one single giant melting pot. Especially by actions of small group of elites. It took a long time to have nation states emerge. Creating superstate is much harder. It is inherently messy and time-consuming business. It cannot be propelled by idealism alone.
My maternal ancestors lived under the ultimate superstates, known as the First Roman Empire and the Holy Roman Empire, to say nothing of periods under control of the Greeks, Phoenecians, Saracens, Norman French, and Spanish. The first two superstates mentioned grew up via conquest, migration, economic development and were top-down institutions. However, ancient Rome didn't have to put up with nationalism (now dying a slow death) as an ideology, mass communication, and a large, educated population with a sense of concurrent international/national/regional consciousness.
It will be interesting to know when the audits are cleared on these failed institutions how much they lost in futures speculations.
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