Bubble Bubble, Boil and Trouble, Markets Quake and Markets Crumble

There is talk about the property bubble, and now an oil and gold bubble. Commodity prices have had a massive bull run, so will does this bull still have ground to cover? There is a real possibility the answer is yes… quite so.

Commodities have cycles like any other product, there are cycles such as ‘winter demand’ for oil, or a rise and fall as economies boom and bust, but then there are structural cycles that have to do more with supply and demand. There has been (for instance) a big upsurge in demand for oil but Opec have not increased output in order to meet the demand. The US Economy is slowing down (don’t use the R word!) and Europe is following, so if some of the major markets are starting to slow then what will that do to Oil or other commodities?

Oil prices in Euro’s prices went from €16 to €68 because the Euro got so much stronger against the Dollar, so is the solution to buy from the Iranian Oil Bourse which deals in euros? Supply …

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predictions for 2008

I have five minutes to go before I have to leave so here are a few of my predictions for 2008

I had mentioned buying northern rock shares a while back, and i am pleased to see they took a 7% jump in the last few days. I think the rationale holds true, there is too much at stake for government to allow them to go bust, mainly because the Bank of England gave it more support than it ever should have. This predictions looks likely to come to a good end, just not for most of the shareholders

Next, I have a new prediction for today, and it has to do with the 40 billion cash injection that the Fed gave the market, the base rate may not get cut in the early new year but I have a feeling that the US interest rate will go down further, maybe as low as 3% before this worldwide crunch is over. The problem still boils down to interbank distrust because their rates are extraordinarily high. the Euribor hasn’t come down …

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