Fucked Yen : Dollar Oil Politics

[GuyJean]

Never heard of stagflation?

Yeah, the 's' word was being thrown around a few months ago.. But haven't you heard? It's 'slow-down'. Nothing more. Move along.

Stagflation Is Back
http://www.slate.com/id/2185919/

It's like a bad '70s flashback. Oil at $100 per barrel, and now stagflation. The unhappy coincidence of sluggish growth and rising inflation, stagflation is economic poison. (Read my colleague Robert Samuelson's excellent primer on it in Newsweek.) It is the opposite of the economic idyll of the last quarter-century, an era of relatively low inflation and relatively rapid growth.

The stag? Gross domestic product rose at an annual rate of only 0.6 percent in the fourth quarter of 2007 and probably isn't doing much better today. The flation? The Consumer Price Index rose 4.3 percent between January 2007 and January 2008.

The numbers seem positively buoyant compared with our last serious bout of stagflation in the late 1970s, when inflation rates spiked to double-digit levels and mortgage rates were in the high teens. Compared with the mountain of economic woes in the late Carter years, the economic woes of the late Bush years are a mole hill. But that doesn't mean those fretting about stagflation are crying wolf. Here's why...

GJ

[Tsuru]

IMF: risk of global crash is increasing
http://www.independent.co.uk/news/business/analysis-and-features/imf-risk-of-global-crash-is-increasing-415774.html

Financial markets have failed to price in the risk that any one of a host of threats to economic stability could materialise and deliver a massive shock to the world economy, the International Monetary Fund warned yesterday.

The world's chief financial watchdog said the financial system had so far proved resilient in the face of recent price falls but warned the risk of a crash had increased. And when it comes to worrying about a crash in the financial markets that could deliver a body blow to the world economy, it seems that all roads lead to the US.

In other news: With the exhange rate at $1.56+ the eurozone has overtaken the US as the world's largest economy.

[Buraku]

Never heard of stagflation?

We are a long way from that scenario but there are more than a few voices arguing that commodity prices will continue to rally while economies soften. Bear in mind too that oil prices were low while the stock market and economy were barrelling along quite nicely in the 90's so there's no direct reason why they should automatically react with a fall now. There is no "right" price for oil against a given level of economic activity. Here are a couple of old charts:

Very interesting charts

Here's a good youtube on this whole Bernanke disaster
[yt]lTXEWh2yT_g[/yt]
"How much money does the Federal Reserve have?" Rogers asks.
http://www.youtube.com/watch?v=lTXEWh2yT_g

[GuyJean]

Very interesting charts

Here's a good youtube on this whole Bernanke disaster..

Maria needs to use those lips for something other than talking..

GJ

[Buraku]

oh fuck, the dollar is doing really bad today

[FG Lurker]

oh fuck, the dollar is doing really bad today

Yes, but there are clear reasons why it is happening. Like Bear Stearns (essentially) collapsing and being bought by JPMorgan at a 93% discount -- 99% if you look at what they were worth just a couple of weeks ago.

There is serious noise being made about combined currency intervention by the US/Japan/European central banks. I'm not sure if this is a good idea or not. Seeing the dollar regain some value would be very nice (for me, anyway) but delaying the inevitable and dragging this mess out longer obviously isn't desirable.

[Greji]

Seeing the dollar regain some value would be very nice (for me, anyway)

Me too! I would hate to start having to pay Noriko in Euros!

[nottu]

[nottu]

[Tsuru]

$ looks like it hit a bit of a bottom these last few weeks at 1.58 to the €. Hmmm. Y somewhat stable as well at around 160, but the pound is still falling.

[Greji]

[quote="Tsuru"]$ looks like it hit a bit of a bottom these last few weeks at 1.58 to the €]

What are you going to do with the dollar going that low? Buy your own personal 747?

[Tsuru]

What? Just one?

[Greji]

What? Just one?

With all the Euros you should be stockpiling, one for you and one for Mrs. Tsuru. You got a two car garage right?

[Tsuru]

Yeah, what the heck. And another one just for the weekend and to piss the neighbours off.

[nottu]

[canman]

Ok I do understand the the US dollar is tanking and that oil prices are in dollars, so as the dollar goes so does oil. But to have a new high everyday, and for people to say that it is supply concerns, just doesn't make sense. How in less than 5 months can supply concerns grow so much, unless it is being driven by speculation. Today on Bloomberg an analyst plainly stated that Canadian tar sands oil is the worlds most expensive to extract, and it is valued at 90 a barrel. The rest is geo-political concerns and the dollar. Now I might not be the smartest guy in the world, but 30 dollars a barrel for geopolitical reasons, sounds a lot like speculation. I can see the beginnings of a crash on a few different stock indexes if things don't recover soon.

[FG Lurker]

All commodities will rise and fall based on the US dollar. But the USD today is at 100.7 yen. I wonder if Lurker is still hurting.

I missed this when you posted back in March.

I have made adjustments on my supply side. Even with the dollar 10+ points below where it was last autumn I have sales volumes and profit levels roughly the same as during that period.

I would of course be happier if the dollar was back in the 115 range but I can live with it where it is now. The plus side is that the weak dollar keeps new competitors out of my market which is giving me time to solidify my business and prepare for 2009.

[Buraku]

LONDON (AFP)
The dollar inched higher against the euro and yen on Friday in muted trade as the United States celebrated its independence a day after the US currency surged.

The European single currency dipped to 1.5690 dollars in morning London trade from 1.5694 dollars in New York late on Thursday.

Against the yen, the dollar gained to 106.82 yen from 106.75.

"A quiet end to the week is in store as the US celebrates the Independence Day holiday," said Calyon analyst Henrik Gullberg.

The dollar took a breather on Friday after strong gains won Thursday sparked by US jobs data that were not as bad as feared and signs that a eurozone interest rate hike may be a one-off, dealers said.

President Lee Myung-bak yesterday warned that Korea faces a third oil shock.

Nikkei sets longest losing run in over half century

*Nikkei sets 12-day losing streak, longest since 1954

*Nikkei sheds 8.4 percent during the 12-day losing run

*Property firms hit on credit fears

N 225 13,237.89 Down 27.51 (0.21%)

Gas prices to remain high as oil producers try to keep up with demand, agency says
http://www.canada.com/vancouversun/news/story.html?id=7325c853-fbef-49c2-b714-3fb72eac145f

Forget about any relief from high gasoline prices, and start worrying about global "oil shock."

Energy watchdog says no end in sight for high oil prices as rapid growth in China and India drives demand

"Record oil prices in the past several months have become a threat to the global economy and the social welfare of millions of people," Nobuo Tanaka, executive director of the Paris-based energy watchdog, said as he released its newest five-year forecast.

Shares of General Motors dropped more than 12 percent after Merrill Lynch said the automaker will need to raise $15 billion to shore up liquidity

Investors sold shares of big-cap technology companies such as Intel Corp and industrial conglomerates like Caterpillar on concerns about economic growth and rising oil prices.

Make mine Johnny Walker Blue neat.

Put down a big gamble on some savings
I might need it if I lose a few hundred bucks the next weeks ahead

Drinks all 'round



Jack!

It's time to pay up!!

[Buraku]

Some friend told me to switch to Gold a few years back, but I ignored their advice



PS

South Korea is also fucked

July 8 (Reuters) - South Korea's won jumped 1 percent on Tuesday as the authorities stepped in to sell the dollar, but analysts said such intervention could only succeed for a limited time and might end up aggravating the pressures on the currency.
Dealers reckoned the authorities sold as much as $2 billion from their $258 billion in foreign reserves on Tuesday, on top of an estimated $10 billion already sold this year to prop up the won, whose fall has exacerbated a big rise in the import bill.
The intervention backs up Monday's warning to speculators from the finance ministry and central bank that they would "aggressively take concerted action" to defend the currency.
Analysts are sceptical the country can win what looks to be a dangerous game of poker with the markets and some said failure could eventually spark a free fall in the won, which in turn could lead to a massive exodus by foreign investors.
Foreigners are already melting away from the stock market.
They sold for the 22nd consecutive session on Tuesday, the longest selling streak by foreigners since October 2005, and have dumped a net 6.3 trillion won ($6.11 billion) of shares listed on the main index since June 5.

[nottu]

[ketchupkatsu]

I recall someone saying that the US could go down and no other country's heart would skip a beat.
Time for the cardiac stent?
This ain't over yet by a long shot.

Yeah many economist had this theory of decoupling, that with globalization, if one country slowed down, it would not effect other countries, because the other countries could pick up the slack and trade amongst themselves.

Read a report recently claiming that we might not be there yet.

[Buraku]

ooopss.

Jack your bet :P

107.31

Pay your wager or forever be banned from FG

[FG Lurker]

Pay your wager or forever be banned from FG

If I cover Jack's wager can I have him banned? A bottle of JW Blue would be a small price to pay.

[nottu]

[Buraku]

[Mulboyne]

Jack, Pay Up Your Bet!

What has he lost? I must have missed this.

[FG Lurker]

What has he lost? I must have missed this.

In fairness to Jack (did I really just say that!?) the year is far from over.

With the FM twins problems about to explode I think the dollar is in for a wild ride in the coming weeks. I sure as hell hope it doesn't hit 90 but things are not going to be pretty.

[nottu]

[canman]

Are we headed for a crash? It seems that way day by day. With all of the banks in big trouble, GM teetering on the verge of bankruptcy, do any of you see this getting really bad really quick? Watching Pres. Bush, today he doesn't have any ideas what to do. Phil Grahm's remarks about Americans being "whiners doesn't help either. I am at a loss as to where things go from here.

[Charles]

Are we headed for a crash?

Headed? Look in your rear view mirror.

Watching Pres. Bush, today he doesn't have any ideas what to do.

Oh sure he does. He says he just needs to wave a magic wand.