Jul 01

The European Central Bank is expected to boost a key rate Thursday in order to fight inflation. The move may cause a weaker dollar and force the Fed’s hand.

NEW YORK (CNNMoney.com) — The fireworks may come a day early for the financial markets if the European Central Bank, as expected, raises interest rates on Thursday.

If the ECB, Europe’s counterpart to the Federal Reserve, hikes rates, that could put even further pressure on the anemic dollar and send commodity prices even higher.

The ECB will announce its decision on interest rates early the morning of July 3 and will hold a press conference shortly thereafter to discuss the decision.

Members of the ECB, most notably its president Jean-Claude Trichet, have been talking loudly about inflation concerns in recent weeks and have hinted that a rate hike will take place at Thursday’s meeting.

If the ECB does raise rates by a quarter-of-a-percentage point, that would leave its benchmark short-term rate at 4.25%. By way of comparison, the Fed’s federal funds rate is just 2%.

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Jul 01

LONDON/TOKYO (Reuters) - Soaring commodity costs are denting manufacturing activity in Asia and Europe and the outlook looks bleak as new orders drop off in the face of rising prices, surveys showed on Tuesday.

Manufacturing activity in the euro zone contracted in June for the first time in three years while business confidence in Asia’s largest export markets is buckling and output has likely contracted further in the United States.

Purchasing managers indices showed manufacturing activity in the euro zone fell to 49.2 in June, China saw its index fall to a near three-year low of 52.0 while in Britain it contracted at its sharpest rate since December 2001.

The 50.0 mark separates growth from contraction. Factories worldwide have struggled in the face of soaring raw material and energy costs — oil hit over $143 a barrel on Monday.

Meanwhile, the Bank of Japan’s tankan corporate index of big manufacturers’ sentiment dropped to plus 5, from 11 in March, showing their mood has not been darker since 2003.

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Jul 01

American supermarkets are epics of excess: it often seems like every item in the store comes in a “Jumbo” size or has “Bonus!” splashed across the label. But is it possible that the amount of food Americans are buying is, in fact… shrinking? Well, yes. Soaring commodity and fuel prices are driving up costs for manufacturers; faced with a choice between raising prices (which consumers would surely notice) or quietly putting fewer ounces in the bag, carton or cup (which they generally don’t) manufacturers are choosing the latter. This month, Kellogg’s started shipping Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks containing an average of 2.4 fewer ounces per box.

Similar reductions have recently happened or are on the horizon for many other products: Tropicana orange juice containers are shrinking from 96 ounces to 89; Wrigley’s is dropping its the 17-stick PlenTPak in favor of the 15-stick Slim Pack; Dial soap bars now weigh half an ounce less, and that’s even before they melt in the shower. Containers of Country Crock spread, Hellmann’s mayonnaise and Edy’s and Breyer’s ice cream have all slimmed down as well (although that may not necessarily be a bad thing).

“People are just more sensitive to changes in price than changes in quantity,” says Harvard Business School Professor John Gourville, who studies consumer decision-making. “Most people can tell you how much a box of cereal costs, but they have no clue how much is actually in it.” Other segments of the economy have made similar moves to pass on their higher costs to the consumer without raising prices directly. American Airlines announced in May that it would charge $15 each way for a single checked bag, part of what airlines have dubbed “a la carte” pricing, which - along with the industrywide drive to put price tags on former freebies like soft drinks, meals and headphones - some airline observers say is really an effort to avoid increasing base ticket prices.

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Jun 30

Related articles and videos:

- Jim Rogers: Global Economic Outlook

- Jim Rogers: China’s Economic Advance is All But Unstoppable

- Jim Rogers: Bernanke should be fired 2008.03.19

- Jim Rogers says “Abolish the FED” on CNBC 2008.03.12

June 30 (Bloomberg) — Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said investors should steer clear of the dollar as the U.S. economy slows and favor commodities this year.

The dollar has slipped 7.7 percent against the euro and 5.9 percent versus the yen in 2008 as the Federal Reserve cut interest rates to stave off a U.S. recession. Oil prices have doubled in the past 12 months, while gold is up 44 percent.

Avoid the dollar “at all costs,” Rogers, chairman of Rogers Holdings, said in a speech in Shanghai today. “The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything, including seeds.”

Oil and metal prices in New York have surged as a slumping U.S. currency made them cheaper for non-dollar investors to buy as a hedge against inflation in a slowing global economy. The dollar has stabilized in recent weeks, with currency volatility falling by the most since 1999 this quarter.

The comments from Rogers, 65, come two days after he told investors at a conference in Nanjing not to “give up” on Chinese shares, which have made China the world’s second worst performers this year. Rogers, who first started buying Chinese stocks in 1999, said he hadn’t sold any of his holdings.

Commodity Bull

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Jun 28

Got Gold and Silver? - The Infinite Unknown

Part 1:

Part 2:


June 27, 2008
Source:
-1- You Tube

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Jun 26

June 26 (Bloomberg) — Crude oil jumped above $140 a barrel to a record as Libya threatened to cut output, OPEC’s president said prices may reach $170 by the summer and the dollar weakened.

Libya may curb output because of a U.S. law that allows terror victims to seize assets of foreign governments as compensation. OPEC President Chakib Khelil said oil may surge on a European interest rate rise, France 24 reported. Oil, gold and copper climbed today as the dollar dropped because the Federal Reserve gave no signal of higher interest rates yesterday.

“The Libyan comments are helping send us higher,” said Brad Samples, commodity analyst for Summit Energy Inc. in Louisville, Kentucky. “The Libyans are responsible for only about 2 percent of production, but with supplies tight every missing barrel will have an impact.”

Crude oil for August delivery rose $5.09, or 3.8 percent, to $139.64 a barrel at 2:59 p.m. on the New York Mercantile Exchange, a record settlement price. Futures touched $140.39 today, surpassing the previous intraday record of $139.89 reached on June 16. Continue reading »

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Jun 21

Related articles:
- Gold
- Weimar Inflation in America
- Silver Rationing
- Don’t Be Afraid Buy Gold
- The Only “Win-Win” Investment I know of …

June 19 (Bloomberg) — Gold prices may rise to $5,000 an ounce as investors seek to protect themselves against accelerating inflation, said Schroder Investment Management Ltd., which oversees $277 billion of assets globally.

“You could easily see for the next several years that prices rise not to $1,000 an ounce, but prices rise to $5,000 an ounce or beyond as inflation psychology becomes more and more embedded and people become desperate to have a source of value,” said Christopher Wyke, London-based emerging market debt and commodities product manager at Schroder, which oversees about $10 billion of commodity assets.

Investors are turning to gold for protection as two-thirds of the world’s population cope with inflation rates that are climbing to more than 10 percent, Wyke said. Cash and inflation- linked bonds are poor substitutes as low interest rates, coupled with surging inflation, erode the real value of assets, he said.

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Jun 20

(NaturalNews) The fate of the nation’s water supply is under debate as hearings in the House and Senate begin on the Water Restoration Act of 2007. Opponents claim this Act threatens to greatly expand the Federal Government’s roll in water management. This Act would define waters of the U.S. as “all interstate and intrastate waters and their tributaries, including lakes, rivers, streams (including intermittent streams) mudflats, sand flats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, natural ponds, and all impoundments of the foregoing”. In other words, this bill will give the federal government total control of the most basic of all commodities necessary to life on this earth.

The Environmental Protection Agency and the Army Corps of Engineers currently have authority over all waters considered navigable in the U.S. The Code of Federal Regulations 33 CFR 329.4 defines navigable waters as “those waters that are subject to the ebb and flow of the tide and/or presently used, or have been used in the past, or may be susceptible for use to transport interstate or foreign commerce.”

The Water Restoration Act, a bipartisan bill lead/sponsored by Congressman Oberstar, is an amendment to the Federal Water Pollution Act, commonly known as the Clean Water Act. Since major amendments were enacted in 1977, the Clean Water Act protected all of the nation’s waters as Congress intended, until 2003, when the Bush administration gave in to pressure form corporate polluters and redefined the meaning of water. This happened through a bureaucratic device called a ‘guidance’, whereby the EPA instructed federal environmental law enforcers to back off from holding many polluters accountable.

Proponents of the Clean Water Restoration Act see it as restoring what was Congress’s original intent, that the Clean Water Act protect all of the nation’s waters. They see water quality and quantity issues as needing examination this spring, and believe now is the time for getting legislation to protect the water supply in order with the passage of this Act. They see the Act as offering needed protection from water pollution, from terrorists, and being in the interests of national security.

Is water a basic human right or a commodity?

Related article: UN rejects water as basic human right
Actually this should cause a global outrage and a revolution
. - The Infinite Unknown

Under the Public Trust doctrine, the government is prohibited from converting something such as water to the status of a commodity. Water is considered a basic human right that must remain in the public trust, meaning that it is so important to our survival that it should never be reclassified as a commodity. Many believe that the Water Restoration Act lays the foundation for removing water from the Public Trust and facilitating it to fall under the ownership and control of corporations as a commodity. This is similar to how seeds have fallen into corporate control when they were once viewed as part of the Public Trust under the assumption that all people have a right to seeds with which to grow food for themselves.

Commodity owning corporations can now sue the government if it acts in any way to prevent them from making profits they believe they are entitled to. This ability to sue for impaired profit making can be the result of environmental regulations, of Federal laws which may prevent the corporations from hiring illegal workers, or issues of eminent domain in which an individual’s land stands in the way of corporate earnings, and the courts have not acted to protect the interests of the corporation.

All the corporation has to do to supersede federal law is claim ‘trade illegal’ provisions of NAFTA and CAFTA. Federal laws and regulations are then put aside, along with property rights. CAFTA goes a long way in establishing the privatization of water supplies, including in-land navigated waters and the right to use and access the water supplies.

Federal control over all water may lead to its privatization

If the federal government is unable to gain total control of all water from whatever source, it is highly unlikely that water can be taken from the status of Public Trust and changed to that of commodity. If in fact the Water Restoration Act allows for the complete control of the federal government over all water in the country, as it opponents claim, water can loose its status as part of the Public Trust, and become a commodity available for corporate ownership.

The Water Restoration Act federalizes all inland and coastal waters from any source. This Act is needed to set the stage for the corporate privatization guaranteed under CAFTA, and would effectively convert the entire water supply from any source into the status of a commodity.

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Jun 17


Iran’s President Mahmoud Ahmadinejad

Iran urges the OPEC member states again to convert their cash reserves into a basket of currencies rather than the tumbling US dollar.

Speaking at a ceremony to open the 29th ministerial meeting of the OPEC Fund for International Development (OFID), Iran’s President Mahmoud Ahmadinejad repeated his proposal made about six months ago in a rare summit of the Organization of Petroleum Exporting Countries’s heads of states.

“The fall in the value of US dollar is one of the pressing problems of the world today,” warned the Iranian president at the conference in Isfahan on Tuesday.

He further expressed concern over the adverse effect of the dollar depreciation on the international community, especially energy exporting countries through increasing the price of commodities like wheat, rice and oilseeds. (This could have also been said by Ron Paul or Jim Rogers. - The Infinite Unknown)

Ahmadinejad said he warned six months ago in the summit conference in Riyadh that there were many indications pointing to continued fall in the value of the greenback.

“And we see that this continues to happen and the resources and wealth of OPEC member countries have been hugely damaged.

“I again repeat my previous proposal; we should have a basket of different international hard currencies as the basis or the member countries should come up and produce a new hard currency for petroleum contracts,” he stressed.

“They get our oil and give us a worthless piece of paper,” Ahmadinejad said earlier after the close of the summit in the Saudi capital of Riyadh. (Which is absolutely correct too.)

The comments by the Iranian president gained backing from Venezuelan President Hugo Chavez as he said at the same event, “The empire of the dollar has to end.” Continue reading »

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Jun 09

ST PETERSBURG, Russia (Reuters) - Russian President Dmitry Medvedev blamed “aggressive” United States policies on Saturday for the global financial crisis and said Moscow’s growing economic muscle could be part of the solution.

“Failure by the biggest financial firms in the world to adequately take risk into account, coupled with the aggressive financial policies of the biggest economy in the world, have led not only to corporate losses,” Medvedev told Russia’s main annual event for international investors in St Petersburg.

“Most people on the planet have become poorer.”

The Kremlin leader said investment by cash-rich Russian companies abroad, promotion of Moscow as a major financial centre and use of the ruble as a reserve currency were part of the answer.

These could help solve problems created by what he said was a gap between the United States’ leading global economic role and “its true capabilities.”

The Kremlin leader said economic nationalism had played a big part in triggering the current crisis, which he compared to the Great Depression of the 1930s.

“No matter how big the American market and no matter how strong the American financial system, they are incapable of substituting for global commodity and financial markets,” Medvedev told the St Petersburg International Economic Forum.

The Kremlin leader also attacked big bonuses paid out in the financial world, saying regulators needed to ensure that incentives promoted “rational behavior based on a balanced evaluation of risks and rewards.”

U.S. Secretary of Commerce Carlos Gutierrez, who spoke shortly after Medvedev, appeared to reject the criticism.

He said the United States had never based its policies on “economic egoism” and believed in free trade.

“Globalization is in the national interest,” he added. Continue reading »

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