Elaine Meinel Supkis
High oil prices are tormenting all the oil importing nations. This, in turn, is causing tremendous global inflation. This has happened more than once in my life. We have to understand the nature of speculators, high oil prices and how this impacts all sectors of the economy. And the dark pools run by banking houses whereby they can trade alongside the pirates of the hedge funds, these are a big problem that also cause global inflation. And the bankers want to coordinate these dark pools so they can conspire to make this much, much worse. The bankrupt banks need some money stream they can tap and nothing is better than to use energy and food as that money making machine! Which kills all other business, of course.
The government rationed food during World War II and gasoline in the 1970s. Now, it's imposing quotas on another precious commodity: 2008 dollar coins known as silver eagles.
The coins, each containing about an ounce of silver, have become so popular among investors seeking alternatives to stocks and real estate that the U.S. Mint can't make them fast enough. In March, the mint stopped taking orders for the bullion coins. Late last month, it began limiting how many coins its 13 authorized buyers world-wide are allowed to purchase.
I have been around a while. I remember several times in my life when people hoarded real silver coins and other silver things, gold suddenly shot up in value, and of course, the fundamental item, oil was the #1 thing to shoot upwards. Food always roared alongside fuel. These cycles always coincided with wars, the creation of excess debt leading to a fast growing money supply an the dollar being heavily devalued. Which only ends when interest rates go up. We have had recessions caused by other things. There have been other bubbles. But the killer recessions, the ones that lead to the greatest dislocations are the ones that feature high oil prices.
It was popular during the 1990's to pooh-pooh the war=>high oil prices=>inflation=> high food prices. Then, the story line became, 'So what? Food and fuel are only 12% of the average American's income.' Of course, left out of this was the horrible idea that the times food and fuel are 12% of the income is when they are CHEAP. When they are expensive like we see today, they are much more than 12% of the income. The purchase of cars, houses and TVs are usually by getting loans. Generally speaking, the middle class pays cash for food and fuel.
So when the fuel gets very expensive, they have to use credit to buy something which is burned, not something that can be sold on ebay, say. Differentiating between purchases that can be resold such as houses, cars or TVs and those things which are consumed and ceases to exist, is very important. The more people have to spend money on one-time consumables, the poorer they are. So when people have to go into debt to buy heating oil, say, this is very destructive over time. On top of this, when the government and the central bankers conspire to make savings impossible by keeping lending cheap, savers who have anything left over after paying the heating bills, will buy something that will retain its value as the currency debases.
Once upon a time, we got silver coins the old fashioned way: the government issued these things and we simply passed them hand to hand! How elegant. Now. they are 'collectables' and we have the comedy of paying $20 for a $1 coin, for example. Whatever the price, the yawning gap between what a coin cost us in 1960 and what it goes for today is a terrible testimonial about inflation. True, TVs and cars got relatively cheaper compared to our incomes! But not fuel and food. A 5¢ loaf of bread is now over $2 a loaf and climbing rapidly.
So now, the Mint can't mint enough coins? This is amazing and shows us the utter, foolish failure of the Fed. The Fed should be ashamed of itself. And as I keep saying, the banking system is really bankrupt. Our Mint is muck. Our government is a failure.
Hedge funds are riding high on record oil prices - and now retail investors are joining them. Louise Armitstead reports
Retail investors have joined a raft of hedge funds and pension funds in making millions of pounds by cashing in on the oil crisis.
Thousands of individual investors have piled into oil futures and have made as much as 200 per cent returns as the oil price soared to record highs in recent weeks.
Last week oil prices jumped 7 per cent, breaking three records and touching $135 a barrel on Thursday on new fears that supply is outstripping demand.
Clive Cooke, chief executive of City Index, the financial spread betting firm, said: "We've seen a big switch into oil - it is now by far the biggest trade at the moment."
One trader said: "The price has doubled in a year. With leverage on top this has equated to huge returns and it's been a one-way bet all the way.
Global inflation is being made much, much worse thanks to the speculators. According to what I have read, these pirates get to buy futures with only $6 per barrel. The rest being LENT to them and they pay only when the contract is completed in the future. If the price drops and they can't sell this future oil for $134 a barrel and say, it goes for $120 a barrel, they have to pay the difference. Or go bankrupt. Usually, the get rich if they and their buddies can keep bidding up the oil. And if they fail, they go bankrupt and no one pays up.
Another endless hole in our collective pockets. This game is destroying international trade and economics. Look at how bidding up the price of oil is shoving much of the planet into poverty and insurrections! As all the economic systems collapse, all the pirates want is their cut! This is why I call them 'pirates'. They have no social responsibilities. And the cure is very simple: the Bank of Japan and the Federal Reserve simply have to raise interest rates so high, these pirates can't borrow obscene future funds and then use this to jack up the price of various things!
When inflation becomes GLOBAL it has to be stopped. And each and every time this has happened in the past, the only party capable of stopping this madness was the US and the tool was higher interest rates. This medicine is bitter but it is the only cure. Or we can sit idle while everything spins out of control.
Airbus SAS, the world's largest commercial aircraft maker, is valued at ``less than zero'' after this year's 31 percent drop in the shares of parent European Aeronautic, Defence & Space Co., according to Lehman Brothers Holdings Inc. analyst Joe Campbell.
``The market is viewing Airbus as a liability, rather than an asset,'' said Campbell, 62, who is based in New York and has ranked among the top five aerospace analysts for six consecutive years in an Institutional Investor magazine poll.
Not only Airbus but all the airline industry will go under if this keeps up. Not to mention the goofy US auto industry that put all its eggs in the SUV basket. I read in the news that airlines are charging an arm and a leg for every extra thing: luggage, pets, unaccompanied children, they scour their charges to see what they can raise. We will see, like the last three times we went through this war/oil/inflation messes, quite a few bankruptcies and probably some jet disasters like the one today in Europe where a jet taking off simply broke in half and crashed. Both Europe and the US depend very much on selling expensive jets as a way of balancing the trade deficits. Not that the US comes even remotely close to balancing anything this way. But it is always trumpeted as a great thing when Boeing sells a jet. This is going to dry up. Europe is already hurting badly from this. And the whole point of everyone building bigger and bigger jets is to save money on staff. The same pilots will fly double the passengers and thus, make a profit for the airlines. But not if there is huge oil inflation.
French Finance Minister Christine Lagarde said she wants policy makers to seek a stronger U.S. dollar and Chinese yuan against the euro.
``I would arm twist whoever is holding these strings to pull the dollar up,'' Lagarde said in an interview with Bloomberg News in Chicago. ``I would like to do that for the yuan as well.''
European officials including Lagarde are concerned that the strength of the euro against the dollar and the yuan would hurt the competitiveness of their exporters. Even after the dollar tumbled around 17 percent versus the euro in the past 12 months, Europe's economy has shown resilience to the U.S. housing recession that pushed up borrowing costs worldwide.
Welcome to the Floating Currency Regime! Nothing is solid, everything goes up or down and no one knows how to change this. Well, this was a temporary condition that is now chronic. The Europeans want to fix it by jawboning everyone into a configuration that suits Europe so they can export huge amounts to the US and have a trade surplus with us. We, on the other hand, have to use our currency to balance our trade. We should have the weakest currency on earth since we have the biggest trade deficit on earth for years and years. But no one wants this, the least of all, the US consumers. So the dollar is kept at an artificial level and the Europeans complain bitterly but dare not say why. Except generally speaking. At least they admit this is all about trade!
But the US has no allies in this matter, only bitter rivals. The sooner we understand this, the better.
Goldman Sachs, Morgan Stanley and UBS are to link their private stock trading operations to improve liquidity and better compete with the increasing number of alternative exchanges.
The move, to be announced on Tuesday, will give clients of each bank access to the other’s so-called dark liquidity pools – the private interbank or intrabank platforms widely used to trade stocks away from exchanges.
The pools are used by clients such as hedge funds to buy and sell large blocks of shares in anonymity and without the danger of moving the public price of a stock on an exchange.
The development of dark pools is considered a potential threat to established exchanges. Some analysts suggest the various pool providers could eventually join together, combining their individual ones and then applying for exchange status.
Tuesday’s move stops short of combining the banks’ respective dark pools. “These are access arrangements,” said Will Sterling, managing director of UBS’s electronic trading. “These agreements should offer clients access to additional high-quality liquidity without making their trading process more complex.”
Great. Just what we need. Everyone diving into 'dark pools' where they can buy and sell stocks unseen and no one except the insiders have any idea of what is really going on! I say, all these damn dark pools should be drained because they are swamps. This is wrong, wrong, wrong. The entire system is being hauled into the darkness and this is bad, bad, bad. For as I keep pointing out, this is all about the Cave of Death! Whenever we see this place, we should yell and run like hell.
Simple, eh? This 'joining together' to make dark trades is a CONSPIRACY. And people doing this will do it so they can cheat someone who doesn't know the true value or inside information and this included the SEC. The fact that banks have 'dark pools' is all very much about the whole business of the Derivatives Beast and the creation of Funny Money™. There is no way they should be allowed to do this. It should be illegal. And it is CERTAINLY inflationary. And is feeding the pirates in the speculative markets that are causing global inflation.
TOKYO (Nikkei)--Publicly traded companies distributed 12 trillion yen to investors last fiscal year through dividends and stock buyback programs, a record amount representing nearly half of net profit.
And hooray for Japan's 'depression'! As I keep saying, yes---the workers are very depressed. As well as oppressed. The top 1% of Japan has had record profits, their corporations are doing great and they are taking over America. Isn't that hilarious? Every week, I like to point this out. Someday American writers might notice this. Heh. Eventually. If we remind them hard enough.