Loading ...WAR, ENERGY, BANKS & USDOLLAR
WAR, ENERGY, BANKS & USDOLLAR
“On the eve of the next war front to explode in the Persian Gulf region, some thoughts on the energy sector seem appropriate which attempt to tie some factors together. In the last two to three years, the biggest challenge to analysts is not so much identification of certain relevant effects, as it is integration of analysis on a several simultaneous patently clear crucial factors for correlation. To friends an assessment has been often used by me, “This is five dimensional chess, and at any one time, three dimensions are dominant. All are linked increasingly and with more complexity. The challenge is to finger the most important pairs of factors.” That covers it in my opinion.”
“The tight relationship between the crude oil price and the USDollar valuation is historically well known, firmly in place for over three decades. While the United States owns control of the world reserve currency, a delicate PetroDollar linkage factor remains in force. Since large oil purchases are conducted in US$-based transactions, entire banking systems are designed accordingly so as to handle those transactions. Some Persian Gulf nations like the United Arab Emirates and Qatar have diversified more of their reserve assets away from the USDollar and its related (in)securities. Instability in the region is very likely to deliver some additional instability to the USDollar itself. What the current hellbent political leaders seem to ignore is the potential for continued and amplified economic and financial retribution and vengeance on the most vulnerable façade to the United States monolith, its faulty financial flank.”
“The risks to the USDollar are rising from both liberal monetary forces and desperate energy forces, not to mention geopolitical backlash forces. The US has isolated itself irresponsibly. Prudent decisions and adept leadership have taken a back seat to private profiteering and the rule of law. One could defensibly claim the public till has been ravaged, with enormous weaknesses having been made more vulnerable. Too bad Thomas Jeffersion, George Washington, and James Madison could not sit as permanent immortal special prosecutors in a triumvirate tribunal. Instead, dissenters are more likely to be imprisoned, to disappear, or to be buried. Maybe Harry Schultz is right. Descriptions nowadays of certain figures are closer to Adolph than Winston, closer to Beelzebub than to any Prophet in my book”
http://www.freemarketnews.com/Analysis/65/7210/willie.asp?wid=65&nid=7210
Comment: Some other noteworthy statements in the article:
“Given the financial conditions measured by current account deficit, trade gaps, foreign dependence on USTBond purchases, foreign dependence for commodity & energy supply, credit growth, derivative mushrooms, absent manufacturing base, one must conclude the USGovt is in worse shape than the highly publicized cancer-ridden subprime mortgage lenders.”
“The most critical USDollar and gold factors today are:
· The War for Oil in the Mideast (nix mention of politics & religion)
· The Bank of Japan (gradual interest rate hikes, we must hope)
· The Mortgage cancer in United States (surely more than subprimes)
· The management of Chinese foreign reserves (new $300 billion kitty)
· The exploding credit derivatives (compound annual 80% growth rate) “
