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Elaine, great news coverage and analysis.

Today, yen carry trade investors are fleeing the BRICs and semiconductors as the Bank Of Japan cites increasing risks from global inflation.

ActionForex/CEP News/Kevin Franco reports that the Bank of Japan's monetary policy board is concerned about the rising risks to global inflation, according to minutes from the Bank of Japan's, BOJ, monetary policy meeting on May 19 and 20.

"Many members said that the recent rise in the prices of primary commodities was not only due to increased demand brought about by growth in emerging economies, but also to various other factors such as supply constraints, heightened geopolitical risks, accommodative financial conditions (Richard: Bank of Japan 0.5% lending, and US Bank lending used for investing in indexed commodity funds and futures contract speculation), and a 'flight to simplicity'," according to the minutes.

"Some members suggested that the Bank of Japan should pay attention to inflation expectations and price setting by some companies. Core CPI is expected to continue to trend higher and should be watched carefully.

Members also agreed that risks to economic growth both at home and abroad needed to be monitored as well."

"Although overseas economies taken as a whole continued to expand, downside risks remained elevated as the disruptions in global financial markets had continued and growth in the U.S. economy had been sluggish," read the text.

The bear market, starting disinvestment from stocks and bonds worldwide is strongly underway today.

It was on May 19, 2008 that the TAF, TSLF, and PDCF rally ended; and on June 10, 2008, that for all practical purposes the yen carry trade rally ended.

And today, the bear market picked up steam as those with yen carry trade loans sold off traditionally favored yen carry investments: the BRICs, EEB, Semiconductors, XSD, and Nasdaq, QTEC fell significantly in early morning trading.

Banks, KBE, and investment bankers, KCE, also led the overall US market down.

The EUR/JPY, which is the yen carry trade barometer, FXE:FXY, showed a minute downturn at 1.68.

The CRB commodities ETF, RJI, manifested a kind of shooting star, spinning top doji at 13.60 as base metals, JJM, rose 2% on John Simpson's BBC News that 'Copper Mountain', Mount Toromocho, is now in Chinese hands.

The gold ETF, GLD, was pulled up by the base metals action to 87.8, but on falling volume, suggesting that a fall lower to 85.4 or 84.5 is very possible.

Although gold could easily fall lower, I suggest that one dollar cost average a buy of gold at Bullion Vault.com, GoldIsMoney, and in the gold ETF, held in a trust account, not a brokerage account, all before July 4, 2008.

Blunt Force Trauma

"Bush was on national TV today yelling about how we must pump more oil out of our last oil fields."

Yes and monkey-boy wants all protected ares to become unprotected in order to start drilling for more oil to keep up this unsustainable Mc Mansion and drive thru Utopia. What a fool and so are those that believe him. Besides, how much oil will there be in those areas anyway? Enough to last a year? Maybe two? What about the expense and damage to those areas in the quest for more fossil fuels? The Alberta oil sands just dumped a major wad into a recreational lake. Yea. Great.

I do believe we are on to our way to our rude awakening and we will not enjoy it one bit. Especially those in major cities where life is decadent and convenient.

Elaine Meinel Supkis

I didn't know about the pollution of one of the lakes in Canada! One can read the news all day and miss tons of things.

Blunt Force Trauma

Actually it happened in 2000, but they are still fighting over it to this day.

Here is the CBC story on that:


Blunt Force Taruma

Oops. I'm screwed up today. Grr. The company that is responsible for this event was previously fined in 2000. There. You'll read the story. You'll get it. I need more coffee.

And here's Decider-Commander: Bush urges Congress to end offshore oil drill ban:


See? Monkey-boy.


Water depletion has been shoved off as an issue by the band new Stetson hat cowboy Harper. The tar sands area is called the Athabasca basin. The Athabasca river is dropping in levels due to the water consumption of the tar sands industry. The river is at its limit, more development will turn it into a trickle - see the once mighty Colorado as it empties into the Sea of Cortez. Many communities are located on the river and completely dependent on it for water. Yet 'investment pros' are counting on a doubling of production from the basin. So is Sam Bodman, Mr. Energy Secretary. The circus came to town, and it's been there for seven years.


I've been hearing that there will be a polluted sump/lake the size of Ontario and
Erie combined, to contain all the waste water
from processing/flushing that tar sand. Not to mention the increasing speed of depletion
of Alberta's gas fields used in cracking the
oil out of that filthy sand. That gas is used
in my home and others in the NW US for heating purposes.We're going to shiver in
the rain here for this bad craziness.

God, we're just a bunch of bone throwing apes fighting over the shinking pool of
water, er hydrocarbons, on the drought addled savannah. We have NO national purpose anymore that can mobilize us for emergencies like this to commit trillions --we dont have-- for alt-energy research. Something Carter was going to do until it became "morning in

And now all those poowah poowah yuppies on
Nantucket Island will be looking at derricks instead of wind farms off of their pwecious
widdle island that no one else can afford to take the ferry out to.

Ha ha this is what they get for howling about wind farms marring the seacape off of
their little Xanadu.

So much for Scallops being affordable in the
near future. The Portagee fishermen in New
Bedford will go beserk. I feel for them but
not the Grahams and Clintons.

Elaine Meinel Supkis

Yes, the tar sands concept is totally crazy. I agree on that. But they will do many desperate things to keep the car status quo running.

Bear of Little Brain

Welcome to "Planet Easter Island"


North Dakota and Montana are the 'new' hot spots for oil/gas exploration:
Dakota Oil Fields of Saudi-Sized Reserves Make Farmers Drillers June 3 (Bloomberg)
the Bakken formation, a sprawling deposit of high-quality crude beneath the durum wheat fields of North Dakota, Montana and southern Saskatchewan and Manitoba....
And unlike the tar from Canada's oil sands, Bakken crude needs little refining. Swirl some of it in a Mason jar and it leaves a thin, honey-colored film along the sides. It's light - -almost like gasoline -- and sweet, meaning it's low in sulfur.

Best of all, the Bakken could be huge. The U.S. Geological Survey's Leigh Price, a Denver geochemist who died of a heart attack in 2000, estimated that the Bakken might hold a whopping 413 billion barrels. If so, it would dwarf Saudi Arabia's Ghawar, the world's biggest field

Oil Rigs Begin Drilling in North Dakota’s, The Big Lake
Oil companies are now drilling beneath North Dakota’s big lake.
Oil companies are using advanced horizontal drill techniques to tap crude oil and gas underneath Lake Sakakawea.

State mineral resources director Lynn Helms says it’s a logical extension to the formation known as the Middle Bakken. The formation lies two miles under the surface in western North Dakota and holds millions of barrels of oil

Massive Oil Deposit Could Increase US reserves by 10x

In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951.


Happy Daze are here again !

Somebody gimme a Cheezeburger !

Do do do do do do do...Livin' ina USA !



You are consistently confident that China has its current financio-political process and future strategies all worked out (some unilaterally, and some in conspiracy with Japan). In other words, they are in control of their trade, fx, and currency situations, unlike the U.S., Europe, and others.

I am not challenging this view, and in fact my own personal greatest nightmare is that China and Japan both will get tired of collecting increasingly worthless dollar paper and stop buyng our debt (or even worse, start selling what they've already accumulated).

However, to keep things balanced, let's not forget there is another way of interpreting Chinese policy and practice.

Roughly summarized, the contrary interpretation goes like this: The Chinese political economists and government bankers are not sophisticated capitalists (yet) - on the contrary, they are hesitant to take any risk and fear change unless it obviously and immediately meets some pre-established policy goal (such as increasing exports and domestic production or securing vital resources). Their guidelines are essentially "When unsure, buy Treasuries - and you will always be unsure."

Crimson Ghost

This headline tell us all we need to know about the Fed and its disdain for working Americans.

Poole Says Fed Has to Deter Inflation From Fueling Wages: Video
Bloomberg, June 17, 2008 09:51 EDT

Elaine Meinel Supkis

Michael, the Chinese leadership was very naive...in 1984. But that was many years ago. And also, they listened to me back then so they are CERTAINLY not naive at all. They know we are on the path to destruction and face bankruptcy. They knew back in 1984 that if they enabled our government to ignore trade deficits and government deficits, we would spend our way to bankruptcy.

This is their 50 year plan. We are in year 25 of this plan and so far, it is going 100% the way they figured. They lived with me, after all. And got to watch me rage about things for years.


Ghost.. regarding the Fed's indifference. With a hat tip to Kevin Depew. Elaine, this could be material for a future column as well?


According to AARP, from 1991 to 2007 the rate of bankruptcy filings by seniors increased 150%. for those 75 and older the increase was even larger, 433%. Meanwhile, the filings by people under age 55 decreased for all age demographics over the same time, -24% for 45-54, down 30% for 35-44 and down 46% for 25-34. How could this be?

The reason is simple: the majority of seniors are living on a fixed income while health care, food and energy costs increase even as interest rates have remained artificially low. Real interest rates have been negative for seven years. This punishes anyone who is risk averse and dependent on an income stream from deposited assets.

Yes Mike, keep telling yourself that the Chinese are naive. Also that you did a great job at State toeing that line.


RE: Comments on the Bakken Field in North Dakota. (I will post
again as soon as I hear from K.Deffeyes)

The Bakken stories are mostly hype:

1.The Bakken Formation, initially described by geologist J.W. Nordquist in 1953,[1] is an immense blanket of rock...

Ever heard of the expression it's "like trying to get blood out of a stone"?Well most of the the oil in the Bakken formation is not liquid,it;s locked up in shale rock.

2.Bakken serves as a significant oil reservoir,and until recently has long frustrated efforts to extract its oil, initially discovered in 1951.
Porosities in the Bakken average about 5%, and permeabilities are very low, averaging 0.04 millidarcies—much lower than typical oil reservoirs.[2]

If porosity and permeabilty are that low[5%] the oil is very difficult and costly to extract.A brief description of porosity:

Reservoir Rock - If a rock has enough porosity and permeability that oil or gas can flow through it, then the rock is a potential reservoir. Although the amount of pore space may not be very much, most rocks, in particular sandstones and conglomerates, have at least some porosity. If enough pores are present, the pores are large enough, and the pores are interconnected so that fluids flow through them (i.e., the rock is permeable), then the rock is a potential petroleum reservoir. With sandstones, a porosity of 18% or more is usually needed for an economic oil reservoir. Gas flows easier than oil, so as little as 12% porosity may be enough for a gas reservoir. Less porosity, perhaps as little as 9%, is enough if the reservoir is also fractured. Because of fracturing, limestone and dolomite reservoirs can have much lower porosities than sandstone, yet be capable of producing greater amounts of oil.

Its all in the EROI...Energy Returned on Energy Invested
W.Texas EROI was 500:1 ditto for Iraq/Iran/Saudi
30:1 for Prudhoe Bay
2:1 for Alberta Tar Sands
1:1 or less for oil shale....ie, Thermodynamically Impossible
Oil like water can flow uphill towards money only up until some
point. If the EROI is 1:1 or less....Impossible


LEAP/E2020 GEAB N°24

Elaine Meinel Supkis

Thanks for the technical clarifications, Gary. Yes, the extraction costs in the form of energy needed plus pollution grows greater and greater as we use up all the cheap, easy oil reserves.


"Water depletion has been shoved off as an issue by the band new Stetson hat cowboy Harper"

That would be news to this group of scientists and regulators...




“I've been hearing that there will be a polluted sump/lake the size of Ontario and
Erie combined, to contain all the waste water
from processing/flushing that tar sand. Not to mention the increasing speed of depletion
of Alberta's gas fields used in cracking the
oil out of that filthy sand. That gas is used”


Lets see Lake, Erie and Lake Onatrio combined =


2,120 cubic km’s of water

45,200 sq km’s area


Syncrude, the largest tailings pond in operation since 1973



540,000,000 cubic meters = 0.54 cubic km’s

greatest axial length 18km, worst case area 324 sq km’s


Overall tailings by 2010 (all operations)


1 billion cu meters = 1 cu km


Mea Culpa on the size quote of the Alberta
Tar Sands sump. It will only be the size
of Lake Ontario

From Richard Heinberg:

""The primary method used to process oil sands yields an oily wastewater. For each barrel of oil recovered, 2.5 barrels of liquid waste are pumped into huge ponds. In the Syncrude pond, 14 miles in circumference, 20 feet of murky water floats on a 130-foot-thick slurry of sand, silt, clay, and unrecovered oil. Residents of northern Alberta have engaged in activist campaigns to close down the oil sands plants because of devastating environmental problems, including displacement of native people, destruction of boreal forests, livestock deaths, and an increase in miscarriages.

"Replacing conventional crude with oil sands to meet the world's energy appetite would require about 700 additional plants the size of the existing Syncrude plant. Together, they would generate a waste pond the size of Lake Ontario. While oil sands represent a potential energy asset for Canada, they cannot make up for the inevitable decline in the global production of conventional oil."


Tailing equivalencies to Lake Ontario, a patently absurd assertion, stand with it if you must.

They'll never be 700 plants in operation

I was talking to some workers constructing modules in south Edmonton last week, production is on slowdown. They're running out of pipe. That's not even taking into consdieration environmental and economic factors. These factors will prevent viable oprations on the scale suggested.

The assertion that oil sands operations do not fall under environmental protection legislation and scientists/regulators are ignoring and obfuscating environmental impacts in service of economic and political expediency is also false.

I will admit the scenario’s appeal to frothing hysteria however.


Yea, and the "regulations" under
Harper W. Bush are really a thing of
beauty, eh ?

Just like the "regulations" now enforced
by our own new and improved corporate friendly EPA, eh ?

I tink you Canucks are getting hosed by
your own neo-conz now and not ours anymore !

Vive le Canada

Buffalo Ken

yeah, but I betcha the "canucks" come out of it way before the us of a does.

they are not nearly in as deep as the us of a is.

Buffalo Ken

of course, that is just a "mans" bet. no money - we are just talking here. You know.

But shit, there needs to more discussion and less of a lot of things....

As Alanis Morrisette would say...."the fire trucks are coming round the bend"...."you learn".....


Canuck, the link did not work. Your reliance on the integrity of your regulators is your business. I know that one Christine Todd Whitman, she had some minor post at the DEP in the USA, sent rescue workers and thousands of volunteers to dig through asbestos filled rubble while assuring all that no hazard was present. Now that the disease is taking its toll, the DEP says, nothing was wrong. And if you think that cowboy Harper is not for sale, look at the handover of PWI to Arab interests, right before the big oil spike. When you accuse others of fomenting hysteria, make sure that you are not fomenting somnolence.

Buffalo Ken

somnolence - hell yeah, there has been a bunch of that going on around lately....


tv watching and all 2
less behaving.

Lets just get inwit. No more agenbite.....

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