[Peace] News notes 041127

[Joe Futrelle]

I just want to add some detail on the energy economy because it's 
linked to the U.S. dollar.

At 11:27 AM -0600 11/30/04, C. G. Estabrook wrote:
>[7. US ECONOMY] The dollar continued its precipitate fall against world
>currencies, as inflation rose, and many credit card lenders were doubling
>and tripling their rates. Meanwhile the number of millionaire households
>has increased by a record 2 million over the past year.

Oil has begun to rise again, to around $50/barrel. Natural gas is 
still off its recent peak of around $8/MMBTU due to mild weather in 
the Northeast.
http://www.wtrg.com/daily/oilandgasspot.html

Saudia Arabia is talking about increasing oil production to try to 
outpace demand enough to give it some leverage on prices, which it 
and the rest of OPEC have lost recently because demand is rising 
faster than analysts had expected. In this case, increasing 
production doesn't mean finding more oil or using existing production 
facilities more efficiently--neither is really a viable option right 
now. It means building new production facilities to drain their 
reserves faster.

Oil prices were one of two factors, along with the weak U.S. dollar, 
that led  the int'l Organization for Economic Cooperation and 
Development to issue a gloomy report on the current and near-term 
future of the global economy. The report notes that "future oil 
prices will crucially depend on further progress in energy 
conservation in emerging economies as well as the United States." By 
"emerging economies" they mean China and India, who make up the 
lion's share of the current demand surge.
http://www.nytimes.com/2004/11/30/business/worldbusiness/31cnd-oecd.html

The big economic nightmare for the U.S. would be if the weak dollar 
caused the oil markets to shift en masse to the euro. Which is why 
all three of those commodities--dollars, euros, and oil, are worth 
watching very closely.

-- 
Joe Futrelle
Person
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://lists.chambana.net/mailman/archive/peace/attachments/20041130/02e17aa7/attachment.html