Economical situation in LOS according to economists

[drogon]

Bibblies: Mr Happy is the part of your anatomy I believe it is?

:grin:

[cavanami]

http://sg.finance.yahoo.com/currency

 

$1 USD = 33.1100

 

...may be at 35 sooner then 1 year

[tree187]

Be careful of the 'speculation' angle in oil, Governments always need a 'reason' and a 'bad guy' to blame. Andyou mention something for long enough as is the case right now with 'speculation' then everyone starts to believe it.

 

For those that follow the price of oil if you look back as it was appraching $100 they blamed it on he 'weak dollar', then as it rose past $110 it was all because of 'demand from India/China'. Basically nobody mentioned the word 'speculation'.

 

Now the weak dollar and india/china have been forgotton they have as I said earlier to invent some other reason.

 

Is there specultion in oil, sure, there always is and always will be, most probably a touch more as the higher a market goes the more people get involved.

 

And as for the peon politicians suggesting that 'speculation' should be banned, what a joke, proves how out of touch and foolish they are. Impossible to ban speculation, and also there's too much money involved. For example, if they did pass a law which says only oil companies and end users can trade oil then the investment banks would start to offer 'synthetic' type instruments that don't buy or sell any oil but rise/fall as the price goes up/down.

 

Again, don't believe the 'speculation' story, learn to look beyond the media propoganda.....

[chuckwoww]

I'm speculating that Israel will find some way to get the US into a war with Iran. Oil will spike to $200 a barrel at which point I sell.

 

"There's a few hedge fund managers out there who are masters at knowing how to exploit the peak oil theories and hot buttons of supply and demand, and by making bold predictions of shocking price advancements to come, they only add more fuel to the bullish fire in a sort of self-fulfilling prophecy."

 

http://www.globalresearch.ca/index.php?context=va&aid=9042

[Sporty]

For sure a complex issue...

 

My two cents, as I watch the currency markets daily.

 

Bush, has nothing to do, with the dollar index, now. If anything, a Republican in the White House, is positive.

 

The US government will move to support the dollar, if needed. Not needed, at the moment.

 

A week ago, many experts, predicted the Euro and Pound to fall, due to credit crissis, not being handled timely. Euro to 135 USD, and big concern, the Euro, has never been tried, with huge downward pressure. Expect it by August 1.

 

All Western Currencies, will hold up well against, Asia Currencies. Now, Viet Nam, is experiencing Infaltion, huge... Thailand, now, with 7.8% inflation expected by the government, is conservative, to my thinking.

 

Strait of Hormuz - 25% of the worlds oil pass out of the Strait... http://en.wikipedia.org/wiki/Strait_of_Hormuz

 

Isreal,,, wild card, Iran, if in conflict will try to close the Strait... This is the big reason, for the oil jump,,, and the dollar fall, Friday, June 6th. Much of this oil goes to Asia.

 

When the price of oil, reaches about $150 a barrel, the USA Government, will take out the speculators, by limiting margin buys, and requiring and following reguiring, those that speculate to take possesion. That will kill, of speculators.

 

Yet, the Europe and Asia market have not been open, to show the impact, Stand by, should be interesting.

I expect the USD, to rise, against the baht to 40 by year end.

 

 

 

 

 

[drogon]

About the euro.

 

The BCE never modified its rate and did not give any signs to lower them.

 

More so, they might be planning to raise it in July to further curb inflation.

 

 

 

Do not know enough about UK economy but I noticed they kept the rate steady despite the crisis in the UK.

[Sporty]

Strange times we live in for sure...

 

Your Quote:

 

"The BCE never modified its rate and did not give any signs to lower them."

 

Yes, that is the timely mistake, they made, so the experts from Europe tell me, in the early AM, weekdays, on business news.

 

"More so, they might be planning to raise it in July to further curb inflation."

 

I seriously doubt ECB will do that, now or near future. In fact, I heard the same thing, from the experts,while shaking their heads in amazement.

 

Comparing that with what Bank of Japan, tried to do, following the rest of the world, in raising rates with out the economy growing, in the early to mid 90's, to have that backfire. WIth lasting negative effects only in the last couple years, really recovering. After making downward ajustments and living with about 1% rate, for 8 or 10 years.

[drogon]

Sporty.

 

I do not know from which country you are from.

 

What the BCE did makes a lot of sense to me.

Their main aim is to fight inflation at the moment.

 

Of course they have to find the right balance between fighting inflation and keeping competetitivity for the entire euro zone.

 

I can see that Spain is suffering a lot, as well as a few other countries which based their economy on the construction sector.

 

The BCE makes exporters cry but on the other hand they fear "the second round" of the sub prime crises plus the fuel speculation to drive inflation higher.

 

This is a delicate balance but now almost all experts back here agree that it was the sensible thing to do.

 

Mind you, the BCE seems to know perfectly that economical growth will get worst by the end of this year. (except if Germany and a few other countries keep astounding development rates)

 

Really, I am not an expert at all, but I wonder which choice is the best?

 

Fighting inflation (and thus they got the full support of the population in the euro zone) so to keep it low.

 

Or keeping competitivity at its best.

 

USA did the second -> it seems that the Fed bank is trying to repair the damages.

 

Or maybe none of these two will work as the global economy is far too much damaged?

[Sporty]

Hmmmm,

 

The European Central Bank (ECB)...

 

Now, as you mention, much of Europe is suffering. (I agree, Germany is a total different situation)

 

One effect of a lower rate, would have been (PAST TIME) to stimulate growth. To late now, the boat has sailed, inflation has set in.

 

To raise the rate, now would cause further, slow down, in the general economy, so they are not in a position, to do that, to fight inflation, without causing a further slow down in economic activity.

 

So, to have a stagnant economy, and inflation, at the same time, is the most difficult situation for a central bank to deal with. As,I mentioned, Japan dealt with...

 

Stagflation, "Economists have identified the two principal contributing causes of stagflation. First, stagflation can result when an economy is slowed by an unfavorable supply shock, such as an increase in the price of oil in an oil importing country, which tends to raise prices at the same time that it slows the economy by making production less profitable"

 

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

 

 

[drogon]

Thanks sporty.

 

We will see how the future goes.

 

In my case, I do not care at all and I would prefer they raise the rate in July like they said they might do.

 

-> more buying power for my euro almost everywhere.

 

If the economy goes down (like it is at the moment in Spain) this is not my problem as I will always find a good job anywhere in the west.

 

Except if there is an EMP attack.

 

Quite selfish but I worked hard to secure this kind of position in a specific "niche"