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Economics

miamizsunmiamizsunHall of Famer
Bad news reported by Financial Times

Oil producers shun dollar

By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London

Published: December 10 2006 20:11 | Last updated: December 10 2006 20:11

Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements........

===============================================

The reason? By keeping the world market for oil trading in the US dollar, it has artificially propped our currency up, and switching to the euro and other currencies decreases the need for the USD. That combined with our crushing debt and deficit paints an unstable picture for the US economic future.
================================================================================ "All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident." Arthur Schopenhauer - German philosopher (1788 - 1860)
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D deleteHall of Famer
The article goes on to say:

"Russia and the members of the Organisation of the Petroleum Exporting Countries, the oil cartel, cut their dollar holdings from 67 per cent in the first quarter to 65 per cent in the second."

and

"The review shows that Qatar and Iran, whose foreign exchange policy has sparked widespread market speculation, cut their dollar holdings by $2.4bn and $4bn respectively."

If this so alarming what currency have you exchanged your dollars for?
D deleteHall of Famer
quote:
Originally posted by _Joy_:
The state of our country gets more unstable every day, doesn't it? I think we should email this article to every leader in our country, followed by "Hello! Anybody awake up there? Could we quit throwing money into a war you guys do not intend to finish anyway? You're killing your own country!"


I think the amateur ecomonist and foreign policy advisors should probably start each disclaimer stating clearly that they don't know what the $%#$ they are talking about.

OMG the sky IS falling o.O
_Joy__Joy_Old Faithful
quote:
Originally posted by Ubermensch:
quote:
Originally posted by _Joy_:
The state of our country gets more unstable every day, doesn't it? I think we should email this article to every leader in our country, followed by "Hello! Anybody awake up there? Could we quit throwing money into a war you guys do not intend to finish anyway? You're killing your own country!"


I think the amateur ecomonist and foreign policy advisors should probably start each disclaimer stating clearly that they don't know what the $%#$ they are talking about.

OMG the sky IS falling o.O


Wow, was that comment meant for me personally or the writer of the article? My my, I didn't realize I was trading opinions with a known expert in the field of economics. Please forgive the little people for expressing opinions.
Rock and Roll Means WellRock and Roll Means WellHall of Famer
I read a few months ago that America owes China alone $3 Billion. And that if each country America owed actually called us out to pay back the debt we would fold in a matter of days. So in a nutshell our war is being funded with borrowed money we do not immediately posses. SO, our grandchildren,etc. will actually be the ones paying for this war, etc. we are "charging" now?

I realize a gov. needs a HUGE amount of money to operate, but if we are already under financial pressure, shouldn't we NOT borrow money and try to somehow raise it ourself (i.e. SELLING OUR CRAP!) Not only do we borrow money, but America really does not produce anything to export. Maybe some agriculture, but not as much as other countries and not as cheap. So we have nothing coming in, and debt stacking up. Sounds like the housing market slump was just a microcosm of the American Goverment. Maybe some agriculture, but not as much as other countries and not as cheap.

I will keep looking for the article. It was a very interesting one.
DILLYDILLYHall of Famer
quote:
Originally posted by Yo estoy de Russellvilla:
I read a few months ago that America owes China alone $3 Billion. And that if each country America owed actually called us out to pay back the debt we would fold in a matter of days. So in a nutshell our war is being funded with borrowed money we do not immediately posses. SO, our grandchildren,etc. will actually be the ones paying for this war, etc. we are "charging" now?

I realize a gov. needs a HUGE amount of money to operate, but if we are already under financial pressure, shouldn't we NOT borrow money and try to somehow raise it ourself (i.e. SELLING OUR CRAP!) Not only do we borrow money, but America really does not produce anything to export. Maybe some agriculture, but not as much as other countries and not as cheap. So we have nothing coming in, and debt stacking up. Sounds like the housing market slump was just a microcosm of the American Goverment. Maybe some agriculture, but not as much as other countries and not as cheap.

I will keep looking for the article. It was a very interesting one.


Sounds like we need to be very friendly to all the nations that we owe. Looks like China has us by the you know what.
Rock and Roll Means WellRock and Roll Means WellHall of Famer
There is definitely an imbalance in imports/exports. And to be engaged in a VERY expensive war and have nothing to sell is like being up a creek without a paddle.

They could have at least invented some really awesome thingamabobber to export, and THEN start the war.

The problem is, we invest all our money in wars and oil instead of balancing that with education and new technology. Asia now dominates the technology industry and autos. Noone WANTS our crap.
We're like the useless friend that everybody invites over for a birthday party out of pity. We didn't bring a present. And we weren't smart enough to even make a card. We just show up and eat everything and hit on everybody's girlfriend hoping one will accept the offer.
Howard RoarkHoward RoarkOld Faithful
Yo & et al,

Where does everyone get the idea the US has nothing to export? Last year, US exported about $1.14 Trillion, including agricultural products (soybeans, fruit, corn) 9%, industrial supplies (organic chemicals) 27%, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49%, consumer goods (automobiles, medicines) 15% (2003).

http://en.wikipedia.org/wiki/US_economy

Without US, the world starves, including China.
BI bama in chi-townHall of Famer
quote:
Originally posted by Howard Roark:
Yo & et al,

Where does everyone get the idea the US has nothing to export? Last year, US exported about $1.14 Trillion, including agricultural products (soybeans, fruit, corn) 9%, industrial supplies (organic chemicals) 27%, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49%, consumer goods (automobiles, medicines) 15% (2003).

http://en.wikipedia.org/wiki/US_economy

Without US, the world starves, including China.


Ding Ding! People in emerging markets such as China and India are experiencing increases in disposable income. When consumers have an increase in disposable income studies show that the first thing they do is increase their consumption of higher protien food. We will be the ones to meet this demand. That is just one example. For all the people against free trade that is an opportunity that the american farmer would miss out on were it up to you.
miamizsunmiamizsunHall of Famer
Oil prices headed toward $125/barrel: Pickens

By Chris Baltimore

Thu Apr 17, 2008 12:08pm EDT

WASHINGTON (Reuters) - Crude oil prices are still headed upward and could top $125 a barrel in the near-term, legendary oil investor T. Boone Pickens said on Thursday.

"It will go up," said Pickens, who heads the BP Capital hedge fund with over $4 billion under management. "Oil is moving to a substantially higher level -- say above $125 a barrel."

U.S. crude futures hit a record $115.54 on Thursday. Oil prices have more than quintupled since 2002, propelled higher by soaring demand from emerging economies like China alongside slow increases in global production capacity.

Despite new production from the Canadian oil sands and elsewhere, Pickens said global crude oil production is unlikely to rise above its current rate of about 85 million barrels per day, while global demand will likely hit 87 million bpd in the third quarter of 2008.

Pickens also expects U.S. natural gas prices to rise from current levels near $10 per million British thermal units to $12-$14 this upcoming winter.

Pickens, in Washington on Thursday to deliver a speech about energy at Georgetown University, made more than $1 billion in 2006 by betting on rising oil prices.

Pickens' hedge fund lost over 20 percent in the first three months of 2008 on a bet that oil prices would fall.

Pickens said his fund is now looking for oil and natural gas prices to rise. Continued...
miamizsunmiamizsunHall of Famer
Our trade imbalance is crushed by the unbelievable amount of money that leaves this country for energy.

This year the estimates are $400,000,000,000 on the low end to $600,000,000,000 on the higher end.

With numbers like that we simply can't dig out of the hole we're in. Something has got to give.

Also, a lot of our manufacturing has been outsourced, expect a lot of that to change soon. Buy local and/or American when possible.

We are setup for the perfect financial storm - in short - hyperinflation. Your money/currency will continue to lose value while prices increase dramatically.

Our commercial farming production is about to go down, I don't know when or how much, but the increase in equipment, fuel and fertilizer, combined with shrinking water sources will make it increasingly difficult for our farmers. We will see a lot of people/families growing the old "victory" gardens where possible.

regards, miamizsun
8I8IHall of Famer
Have you noticed that since this meltdown all the alleged conservatives are quoting Mises and other Austrian/Libertarian Economists? How ironic.

I like Karen DeCoster, I've read her stuff for years. She points out something we Austrians have known and had to tolerate. Abuse and ridicule from Keynesian idiots at every turn. Being right isn't always politically correct and often the rewards are bittersweet....

The Buffoons Aren't Laughing at Peter Schiff Anymore.

"For years I watched Peter Schiff appearing on the MSM, being ridiculed by the clowns who shot him down because he was just some gloomy guy who had a bummer outlook (a nasty "contrarian") and wanted to throw a dash of stodgy common sense into the Bubblemania machine that was gripping America. Time after time he was shot down by incompetent, uneducated, follow-thy-masses boob commentators and fellow analysts on FOX, CNBC, and elsewhere.

Schiff does not have ESP. He is not a forecaster throwing darts at a target. He is not some guy with a gift of unexplained perception. He is a discerning guy who understands basic economics and finance, and applies his education to his livelihood and sticks to his principles, in spite of the direction the mainstream tide is turning. I chuckle when I watch some of the old Schiff appearances, such as this one on FOX from December 2006."
S SeaweedPost Master
Currently when people consider themselves "conservatives" they are primarily mean "social conservative" as in they desire to turn our country into a theocracy. They haven't given a damm about the economy since before 1980.

Those who consider themselves "progressives", but what the mullet wing of the Republican party referrers to as "Liberal" is actually "social librialism" but they are fiscally conservative.

Just look at the 90's , Clinton was a fiscal conservative, but a social liberal. Then we got idiot who is a social conservative, but fiscally reckless, or liberal.

You can look at the difference in where our country was then and now and see which is in our better interest.
8I8IHall of Famer
One look at our current situation and one can see this is still as relevant....

In Defense of the "Barbarous Relic": Why The Enemies of Capitalism Smear The Gold Standard

"The significance of the fact that the gold standard makes the increase in the supply of gold depend upon the profitability of producing gold is, of course, that it limits the government’s power to resort to inflation. The gold standard makes the determination of money’s purchasing power independent of the changing ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence. Every method of manipulating purchasing power is by necessity arbitrary. All methods recommended for the discovery of an allegedly objective and "scientific" yardstick for monetary manipulation are based on the illusion that changes in purchasing power can be "measured." The gold standard removes the determination of cash-induced changes in purchasing power from the political arena. Its general acceptance requires the acknowledgment of the truth that one cannot make all people richer by printing money. The abhorrence of the gold standard is inspired by the superstition that omnipotent governments can create wealth out of little scraps of paper."
M mekirk2Hall of Famer
quote:
Originally posted by miamizsun:
Oil prices headed toward $125/barrel: Pickens

By Chris Baltimore

Thu Apr 17, 2008 12:08pm EDT

WASHINGTON (Reuters) - Crude oil prices are still headed upward and could top $125 a barrel in the near-term, legendary oil investor T. Boone Pickens said on Thursday.

"It will go up," said Pickens, who heads the BP Capital hedge fund with over $4 billion under management. "Oil is moving to a substantially higher level -- say above $125 a barrel."

U.S. crude futures hit a record $115.54 on Thursday. Oil prices have more than quintupled since 2002, propelled higher by soaring demand from emerging economies like China alongside slow increases in global production capacity.

Despite new production from the Canadian oil sands and elsewhere, Pickens said global crude oil production is unlikely to rise above its current rate of about 85 million barrels per day, while global demand will likely hit 87 million bpd in the third quarter of 2008.

Pickens also expects U.S. natural gas prices to rise from current levels near $10 per million British thermal units to $12-$14 this upcoming winter.

Pickens, in Washington on Thursday to deliver a speech about energy at Georgetown University, made more than $1 billion in 2006 by betting on rising oil prices.

Pickens' hedge fund lost over 20 percent in the first three months of 2008 on a bet that oil prices would fall.

Pickens said his fund is now looking for oil and natural gas prices to rise. Continued...


TBP sure didn't anticipate the about face the oil market took at the end of the year. Anyone notice you don't see his commercials anymore? Maybe its because he may have had a plan to get us out of the energy crisis but doesnt have a plan for this crisis....

Kirk
8I8IHall of Famer
quote:
Originally posted by mekirk2:
quote:
Originally posted by miamizsun:
Oil prices headed toward $125/barrel: Pickens

By Chris Baltimore

Thu Apr 17, 2008 12:08pm EDT

WASHINGTON (Reuters) - Crude oil prices are still headed upward and could top $125 a barrel in the near-term, legendary oil investor T. Boone Pickens said on Thursday.

"It will go up," said Pickens, who heads the BP Capital hedge fund with over $4 billion under management. "Oil is moving to a substantially higher level -- say above $125 a barrel."

U.S. crude futures hit a record $115.54 on Thursday. Oil prices have more than quintupled since 2002, propelled higher by soaring demand from emerging economies like China alongside slow increases in global production capacity.

Despite new production from the Canadian oil sands and elsewhere, Pickens said global crude oil production is unlikely to rise above its current rate of about 85 million barrels per day, while global demand will likely hit 87 million bpd in the third quarter of 2008.

Pickens also expects U.S. natural gas prices to rise from current levels near $10 per million British thermal units to $12-$14 this upcoming winter.

Pickens, in Washington on Thursday to deliver a speech about energy at Georgetown University, made more than $1 billion in 2006 by betting on rising oil prices.

Pickens' hedge fund lost over 20 percent in the first three months of 2008 on a bet that oil prices would fall.

Pickens said his fund is now looking for oil and natural gas prices to rise. Continued...


TBP sure didn't anticipate the about face the oil market took at the end of the year. Anyone notice you don't see his commercials anymore? Maybe its because he may have had a plan to get us out of the energy crisis but doesnt have a plan for this crisis....

Kirk


Kirk, the pull back in oil (and energy) is temporary, it will resume the earlier climb upward. We're going to be in a nasty situation.

If your really interested, and can put in a little time, explore this website.

Regards
Howard RoarkHoward RoarkOld Faithful
Oil will only go back up as the economy improves. Hiking the price while conditions are still bad causes a death spiral and competetion amongst the oil producers.

US dollar isn't in the best of health, but its better than most. In Russia, people are closing bank accounts, exchanging the rubles for dollars and placing the dollars in safe deposit boxes.

Europen banks are $2 trillion short of dollars.
8I8IHall of Famer
The problem is economically viable production that is sustainable. It can't happen at these prices. Future production is inevitably becoming more expensive and demand from growing economies will continue to increase. Energy and oil will become more expensive.

The list of countries exporting oil is growing shorter and shorter, while the list of countries importing oil is getting longer and longer. Plus the fact that we're going to be dealing with more and more heavy sour crude in the future, which is much more expensive to refine and bring to market.

Any way we slice it, oil will get more expensive.
M mekirk2Hall of Famer
Yes, oil will get more expensive, as will milk, corn, beans, everything. Prices naturally increase somewhat over time. What they do not do, natuarally, is triple and quadruple in a matter of months like oil did recently. That happens when outside forces manipulate the market (or something catastrophic happens to the market). Kindof like the housing market. We would not have had the houseing bubble had it not been for the government interferring with the market by requiring banks to make loans to risky buyers. More buyers entered the market than there should have been, driving up the prices, leading to the bubble. This recession is a 'correction,' nothing more. Its just a large correction because the markets were so inflated....

Kirk
8I8IHall of Famer
by Glen Allport (this is great!, lol)

Why is Counterfeiting Illegal?

"If printing up trillions of dollars to "stimulate spending" is going to save the economy, why do we ever put up with even the slightest recession? Just print that funky money, boys and girls! Give every citizen a high-speed color laser printer and require everyone to download the Official Dollar Jpeg Files and then print, print, PRINT those dollars nonstop, day and night! Every man, woman, and child would be a multi-billionaire, and economic activity would be red-hot forever!

Why stop at ten giant-screen TVs when you can have twenty? Heck, why not panel every wall in your mansion floor-to-ceiling with big-screen LCDs? You couldn't get them all home in your new Ferrari, but you could easily buy a fleet of vans for the job – and hire drivers for them, too. You could buy ANYTHING YOU WANTED, every day of the year!

See what I mean? How could the economic crisis withstand that? Problem solved! – at least if we believe the rationale for America 's current response to the financial crisis."

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