The curse of 'F' words.

At the moment we are seeing two ‘F’ words which are inflating rapidly, namely, Food and Fuel.

In todays post we will look at the positive effects of fuel and food prices shooting through the roof, and how people can turn this to their advantage. Fuel prices have really shot up in the last year, in fact a year ago the fuel prices were in the mid $50 per barrell range and at this point an analyst from Goldman Sachs (Arjun Murti)had said that we would see $100 a barrel oil soon and he was laughed at, then it came true and suddenly Mr. Murti went from ridiculed to divinity.

Then the man who seems to be able to predict the future went on the record talking about $200 a barrel oil and that sent a shiver down the spine of every oil consumer. In 2005 there were …

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The curse of ‘F’ words.

At the moment we are seeing two ‘F’ words which are inflating rapidly, namely, Food and Fuel.

In todays post we will look at the positive effects of fuel and food prices shooting through the roof, and how people can turn this to their advantage. Fuel prices have really shot up in the last year, in fact a year ago the fuel prices were in the mid $50 per barrell range and at this point an analyst from Goldman Sachs (Arjun Murti)had said that we would see $100 a barrel oil soon and he was laughed at, then it came true and suddenly Mr. Murti went from ridiculed to divinity.

Then the man who seems to be able to predict the future went on the record talking about $200 a barrel oil and that sent a shiver down the spine of every oil consumer. In 2005 there were …

Read More

With stocks going down and gold rising fast is it a 'golden' opportunity to buy gold?

Gold recently surpassed the $1,000 per ounce mark which was (in the past) a kind of financial landmark that would be mentioned along with flying pigs ‘yeah right! And Gold will be a grand an ounce!’ – you get the picture. But now that its a reality, along with oil being over a hundred bucks a barrel is it time to give one of mans oldest financial instruments a second look?

Gold like anything is driven by the market and that’s why it crossed the $1,000 dollar mark, and at the same time Oil hit the $110 barrel mark, that’s partly due to the gold/oil/dollar correlation which was mentioned (and graphed) in a previous post.

Commodities have been in an 8 year bull run and for some reason they have not been getting the press attention they deserve until perhaps the last year, and it still hasn’t topped out? Why? The situation that we have today is that we are in a different economic environment than we used to be, partly because the worlds economy is no longer US-centric. There …

Read More

With stocks going down and gold rising fast is it a ‘golden’ opportunity to buy gold?

Gold recently surpassed the $1,000 per ounce mark which was (in the past) a kind of financial landmark that would be mentioned along with flying pigs ‘yeah right! And Gold will be a grand an ounce!’ – you get the picture. But now that its a reality, along with oil being over a hundred bucks a barrel is it time to give one of mans oldest financial instruments a second look?

Gold like anything is driven by the market and that’s why it crossed the $1,000 dollar mark, and at the same time Oil hit the $110 barrel mark, that’s partly due to the gold/oil/dollar correlation which was mentioned (and graphed) in a previous post.

Commodities have been in an 8 year bull run and for some reason they have not been getting the press attention they deserve until perhaps the last year, and it still hasn’t topped out? Why? The situation that we have today is that we are in a different economic environment than we used to be, partly because the worlds economy is no longer US-centric. There …

Read More

Oil Hostages & European oil dependence

Oil prices are at record highs, not record highs for the last year or decade, but ever. And what we are starting to see now is a realisation by countriees with oil that they hold the cards that in the past they never had, they were at the table and holding a royal flush but didn’t know how to play the game. Up until recently the flow of oil was largely influenced by the USA and the EU but that seems to be diminishing quickly as Arab Nations and Russia grow into the big oil boots they have had for so long but failed to notice.

Here’s a question: Is Russia’s Gazprom, a state sponsored strong arm? They have been holding the Ukraine to ransom lately by denying them oil. Don’t forget: the Japanese went to war with the USA for the same reason 60 years ago, natural resources are unfortunately geographically bound in a very global world. Cutting a nations gas supply during the winter – …

Read More

Oil Hostages & European oil dependence

Oil prices are at record highs, not record highs for the last year or decade, but ever. And what we are starting to see now is a realisation by countriees with oil that they hold the cards that in the past they never had, they were at the table and holding a royal flush but didn’t know how to play the game. Up until recently the flow of oil was largely influenced by the USA and the EU but that seems to be diminishing quickly as Arab Nations and Russia grow into the big oil boots they have had for so long but failed to notice.

Here’s a question: Is Russia’s Gazprom, a state sponsored strong arm? They have been holding the Ukraine to ransom lately by denying them oil. Don’t forget: the Japanese went to war with the USA for the same reason 60 years ago, natural resources are unfortunately geographically bound in a very global world. Cutting a nations gas supply during the winter – …

Read More

Inflation in China 2007

In an article written last week called ‘whats all the fuss about the US dollar’ a point was mentioned regarding the fall of the Dollar and its affect on China’s economy, one of the things mentioned was the inflationary pressure that China will feel when a weak dollar means stronger currencies can purchase more and more commodities like oil.

layman interpretation: Oil is priced in US Dollars, so if the dollar gets weak (eg: at the moment we have a strong euro – so if you went to New York for christmas shopping you could get more for less) then oil becomes cheaper to buy, because everybody needs oil the stronger currencies will be readily able to purchase more and this drives up the price of oil because of demand. China needs oil and almost everything else to continue with growth and as they hold massive dollar reserves there is a twofold action taking place. Firstly their national reserves (in dollars) is worth less, so maybe thats why the Sovereign wealth fund of China is making moves to bail out …

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