big deal that the french will get a glass of wine less a day at lunchtime. thus they will go back to work more sober and increase productivity and become globally more competitive and sarko will take credit for trichet’s deeds.

Separately, Mr. Trichet Thursday also warned euro-zone citizens that rising global prices might mean an unavoidable reduction in euro-zone living standards: “The shift in relative prices and the related transfer of income from commodity-importing countries to commodity-exporting countries have to be accepted,”

hmmm. isn’t this how capitalism is supposed to function: you work and produce, you reap a financial reward. you just print money, then you compete with the people you are buying your stuff from for finite resources.

Trichet seems to understand better than most would give him credit. Our own Bernake could learn a thing or two about inforcing its mandates a bit better. The US is in deep pooh at the current cost of high energy and food prices along with what I would coin as wage destruction.

Trichet is 100 times more honest and realistic than Bernake. Who wants to buy dollars when the US is run by sly manipulative scoundrels like Bernake?

You guys are right, Trichet has the better approach I think. Though Mr. Hanna on a previous post does have a good point (assuming I understand his point), rational expectations may impact inflation more than monetary policy. In fact, Lucas suggests monetary policy only explains 30% of inflation problems and perhaps, rational expectations the rest, something I can not quite comprehend but Lucas is a pretty smart dude. In any event, the only way to prevail is to work 100 hours per week; become the best at whatever you do; and pick a job that is difficult to replicate. In my view the main reason for the economic problems in the U.S. and perhaps, soon Europe (or especially Europe), is people are lazy and rather go to their kids soccer games or get maternity leave for their spouses pregnancies. It is guaranteed the Asian competitors have a completely different work ethic. It seems to me Americans think if they work 40 hours per week and are loyal to their employers (who could not care less about them), they are owed a decent life style, such a concept is ludicrous. The world has always been a place where the strongest survive.

“But if we have a supplier-driven artificial scarcity then it is very grave.”
Crude oil is a sellers market. Buyers have the consolation of “very grave”.

At least Bernake is a trained economist and is in charge of his ship - Trichet is an old-style French ENARC with limited knowledge of economics who acts as a mouth-piece for his (and Europe’s) Teutonic masters. Germany has the rest of the Eurozone by the %@#$’s now and will drag the whole thiong down to its export dependent, low growth-low domestic demand protectionist model. The cat is out of the bag now.

How about lower living standards for central and high-end bankers?

Let’s see how they like it!

He’s right about the living standards, Americans need to get the same message. As far as standing up to OPEC, exactly what is anybody going to do about it?

Are we (US) willing to give up family, friends…etc to work the 100hrs required to compete with countries in Asia? –Maybe we should make better decision on what we buy and were we expend our money?

Joe,
let me paraphrase you: are we (miamidolphins) willing to work and compete when we have already signed contracts that will suffice for the rest of our lives(supposedly)? well, if you dont compete and want to be lasy you will end up dead last and will be out of job,food,and all those flashy things you buy on credit will only be a mirage.

We cannot “work” our way out of a non-competitive situation caused by trade agreements that pit high wage countries against low wage countries.These agreements are contributing to an erosion in our standard of living. If you think home prices are dropping now, keep ringing the free trade bell and see what happens to wages and our economy as this country continues to sell out the middle class.

William Manning is right. Also, since the ECB cut will have the effect of weakening the US Dollar, is this being viewed as a de-facto Fed. rate cut?

American living standards are on the way down, too. You can not have such Bear Markets in both housing and Equities coupled with oil driven inflation and expect to maintain the same standard of living.That simply goes against all common sense.

Everyone is bad mouthing Bernanke for keeping rates low and fueling inflation. Well, what would you rather suffer, a short stint of inflation or a long bout of deflation (depression)? As far as competition is concerned, I keep telling people that until the American worker makes the same wage as the Asian worker for the same job, the deminuation of the American workers real wage won’t stop. There’s no place to hide folks. Globalization has us by the gonads.

Obviously, some sexist female pulled my post for using the medical term for a male body part. Censorship lives at the WSJ.

Agree with I. Noah….In order to remain competitive, an employer will rather pay someone out of country less for a service identical to a US employee, if all things are equal. Common sense prevails.

Had the US started a serious reform of education a decade ago, we would have a work force capable of handling the economic upheavals of globalization. We had better stop playing lip service to education (especially job retraining) and invest the tax dollars necessary to ensure our nations global competitiveness.

From any perspective, I think it is a bad idea for the central bank to discount non-government paper. Some will say this is inflationary while others will argue its subsidizes risk-taking. Both are getting at the same point. We need to work our problems out through the real economy, and I am confident we will. Happy 4th everyone!

Also, one might reasonably ask the question, if it is so terrible to discount mortgage securities with the central bank, how come the mortgage crisis occurred in the dollar market rather than the euro market. The answer to this question eludes me, but the Bundesbank has a well-ordered statistical series on cross-border capital movements within the euro zone that might lead to an answer.

Unfortunately, Trichet is the last of the hard currency men on the ECB. Club Med is agitating to lower rates, not raise them, and soon they will be joined by Ireland on the Board. This will give the Mediterranean member states control over the ECB, over Germany and other northern hard currency nations. The currency debasers of southern europe have been printing money for a very long time, and, once they are in control of the ECB, say goodbye to the policies of men like Trichet. Say hello to a euro which will be less like the German mark that it is now, and more like the Italian Lira, which habitually increased its worthlessness, year by year…

How can we get this guy to run the FED? Bernake is a total failure.

But, then, maybe, I should say “more like the U.S. dollar, which habitually increased its worthlessness, year by year…”

The people running the Fed don’t know their as- from their elbow. Bernanke listens to a group of insolvent Wall Street banks. These banks need low rates to rebuild balance sheets. Meanwhile, the Fed’s own balance sheet is being debased, by huge amounts of “cash for trash” paper. One must remember that the dollar’s other name is U.S. Federal Reserve Note. It is supposed to be backed by the Fed’s balance sheet. Bernanke has given cash and treasury bills in exchange for trash mortgage paper. Does anyone believe that with some $200 billion in trash on the Fed balance sheet, the dollar has a chance at having 33% of its current buying power, in 5 years? Bernanke, quit and close down the Fed.

Mr. BadgerDad: Your thought processes makes sense to me, with regard to devaluation of the dollar, however, due to the unexpected dovish type rhetoric (which I suspect Paulson coordinated with Trichet last weekend) the dollar strengthened. I predict it will not last and in fact, last night on negative German factory the Euro sank to 1.5650 (as I predicted yesterday it would) and I scooped up a bunch of Euros with substantial leverage for a quick 50 point profit and rising. I love this country. I always thought the reason Europe did not experience the financial crisis in the credit markets to the extent of the U.S. is because they are lying about something which I suspect relates to how leveraged CDOs are accounted for under IAS and will leak their losses into income over a longer period of time which potentially avoids a run on the banks plus from what I can tell the big European banks do not have nearly the derivative exposure Bear and others in the U.S. have.

I know I am a dope but maybe the Fed or anyone could explain how the U.S. monetary policy has not caused the price of oil which is in dollars to increase. I always thought the math was simple, M3 has increased by about 100% over the last 8 years according to shadow estimates which incidentally coincides with about a 50% devaluation of the dollar index and oil has increased in dollar price by over 100%. This would seem to support Friedman’s monetary theorems. Likewise, I understand supply and demand have greatly impacted the price of commodities which at most is only 25% U.S. sourced but if supply increases with demand, price should remain constant. What I would be most concerned about is the Saudi’s lying about their reserves which some respectable dudes state the scumbag Saudis are lying about, if this is true, certainly increased money supply and less oil supply will shoot oil to the moon. Blaming the speculators for the price increase is appealing but it is hard to understand how when there are an equal number of buyers and sellers it could cause prices to rise yet one has to believe the more players that enter a market should cause prices to rise. However, if the liars in congress want to blame the speculators, it makes me suspect, it is not the speculators but when the Bush Clan says it is supply and demand, it makes me suspect it is something else entirely though that sneaky genius Rove makes a good case as much as I want to hate him, I can not help but like listening to him on Fox. At the end of the day, since I know the Bush Clan are merely lying profiteers, why did they stop calculating M3 in 2006 if excessive money supply was not the main issue?

The Strong Dollar Policy vs. Cheesecake Story: Recently I stopped in one of the local small food stores/deli’s that sells cheesecake made by a local guy.
Below is a list of prices for the large size in recent years:
Year 1998 - $9
2000 - $10
2002 - $11
2003 - $14
2006 - $16
2007 - $17
2008 - $23
“$23 for you Boss”, the guy at the counter said.
I showed a double saw-buck ($20) and asked him if he would take $20 for the cheesecake.
“No, 23 dollar. Every week dollar get weaker.” he rejoined.
I put my $20 back in my wallet and told him, “Well this is my strong dollar policy.” and walked out.

Ex-Apostle of the $USD, nice story. sad to hear you are sucking your thumb now. i bet you work for your bucks just as hard as 10 years ago.

I’d rather look at the situation like this. Should we try to raise the living standards and wages of the third world to ours, which would probably hurt the bankers and the rich because interest rates would rise and there would be LESS DEBT AND LESS INTEREST PAYMENTS, or should we allow our living standards and wages to decline to theirs, which helps the bankers and the rich because interest rates would stay low and there would be MORE DEBT AND MORE INTEREST PAYMENTS???

Kafka, here is how I see oil. About 50% of the increase is due to the increase in mortgage debt (thru the trade deficit and shipping products here) and government debt (2 wars). About 25% of the increase is due to the weak dollar (trade deficit, budget deficit, interest rates being too low, and some debt basically defaulted on). Lastly, about 25% is due to “speculation” (actually real interest rates that are negative and that the supply and demand curves are practically vertical between about $90 and $140 dollars).

Notice how debt and low interest rates are involved in all three!!!

Kafka, in regards to the demand and supply curves being vertical, draw a “Y” then attach an upside down “Y” to the bottom of the first “Y”. Is that the way the oil market looks instead of the “classic” “X”???

Kafka said: “why did they stop calculating M3 in 2006 if excessive money supply was not the main issue?”

Because they do NOT want people to focus on all the debt that has been produced. I have read that 98% to 99.5% of our money supply is debt. Where do all those interest payments go? The bankers?

Is the U.S. economy becoming a “rentier economy”???

Mr. Fed-Up: Thanks, I am just a greedy pig trying to make money off this oil thing though too much of a pansy to bet on oil, however, much money can be made off the inverse correlation of its price to the dollar especially on the commodity related currencies. If you are right that the spread is $50 due to speculation much money can be made if and when congress or the regulators limit speculators bets either through margin or delivery requirements though it is difficult to see how the U.S. can thrust such requirements on foreign markets, I watched the congressional hearings and think Masters is a self serving liar. Also, the babes on CNBC keep saying speculators are not the problem (though they are rarely correct) and in fact, yesterday when NYMEX reportedly slightly raised margin requirements, oil still went up by about $2 making the AUD a nice bet. Unfortunately for me my economic skills are quite deficient though I understand your vertical line example but am confused on the inverse Y explanation (unless you were kidding). Do you have a source or cite for your views on speculation as I have found no empirical studies supporting such a proposition on the $50 spread and as you know many say the spread is $70? Again, even a credible threat of government intervention in the markets could be a huge money making opportunity.

Fed Up, but it the near term it is so sweet to print toilet paper and get stuff that you can eat, wear, drive, play with etc.and all this in exchange for … toilet paper. yes, yes, it is not that soft before it passes a few hands in circulation… but when those suckers wisen up things will turn really ugly as most of the new generation (y or whatever it is now) will have to acquire tangiable skills the hard way and learn to work late in their lives.

on oil: how would you feel if you dig for oil and you know that the currency it is priced in is being debased 18% yoy? wouldnt you expect at least that much appreciation and then some more for the increase in extremely inelastic demand?

bb - Happily I have very few dollars except for what I need to change over to pay bills etc. I think in the US most do not want to acknowledge that the rest of the world perceives the dollar as really very weak and pass them into the FX market like a hot potato at almost any exchange rate just to be rid of them. Limiting my own dollar money supply enables me to act as my own central bank in terms of demanding price stability for the likes of cheesecakes. Also it didn’t help that the cheesecake guy looked some like Colonel Kadaffi.

Kafka, I agree with raising margin requirements on principle, but I am not sure how big a difference it will make because 1) commodity indexers (like CALPERS and others) probably don’t use margin and 2) investment banks like Goldman can probably “find” more money to put up (especially with a 2.25% interest rate at the discount window).

Kafka, I am not sure about delivery requirements. However, some people say that buying futures does NOT add more demand to the oil market. I am saying if the supply and demand curves are vertical (or close to vertical) that futures trading does NOT need to add demand to get the price up the vertical supply/demand curve. It seems to me it is similar to enron in that they sell the same barrels of oil over and over again until they get to the top of the vertical line (the vertical supply/demand curve between about $90 and $140 dollars).

Kafka, I am not kidding about the Y-upside down Y curve. A picture would be better. See vertical supply curve (perfectly inelastic supply) at:

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

Now imagine that between P1 and P2 the demand curve is also vertical along with the supply curve.

Does that help?

bb, it sounds to me that “print toilet paper” is actually create debt and hope someone pays it back. I don’t think it is right to stick FUTURE generations with the bill for maximizing debt NOW to help maximize real GDP and to help maximize stock prices in the here and now (or in the past if we have hit PEAK DEBT).

bb, as far as the oil and currency issue, how about stop debasing the currency so much?

Although I am in favor of very slight currency debasement if it leads to a price inflation rate and therefore an interest rate that MINIMIZES DEBT!!!

Fed Up: yes and thanks much

Kafka, you’re welcome.

Fed Up, i am just offering you the view of the other side. for me personally money stock should grow with gdp and statistics should be calculated by accounting firms, much like an audit to the government. otherwise on oil physical delivery will definitely discourage speculators as there would be a whole another host of headaches that they have to deal with. but with practically 0 price elasticity of oil demand any price is ok. would one living in suburban area stop driving to work just as because gas is 2-3 times more expensive? there is much more that people can take on and there is always of course somenone willing to stick it to every sucker joe. that is capitalism.

Fed Up,
i am looking at russia as the most potent for growth country if it can overcome their demographic problem. here is in short what happened there: in 1990 one usd was at about 1 rubble. in 1998 it was more than 3000. why? becuase the people were putting up with a failed government and their savings got wiped out. now in the moscow region average salaries are at par with the new york city area. so in 10 years the country could get back on its feet. any other can as well with responsible government. who suffered most in russia? the retired as they have no savings and their pensions now are below par. generation y can stick it to the boomers the same way for voting for bu**sh**.

if the ECB restricts collateral that should add a nice hit to the dollar.

BB and Fed Up: While I think I understand your positions on oil demand elasticity, and speculators, I find it hard to comprehend that there is not some price for oil that will not affect demand (assuming supply remains constant). I have read many articles on the subject and Krugman’s explanation seemed the most reasonable (though that may be because it was the easiest to understand), essentially Krugman suggests that because the above ground supply of oil is not increasing, the speculators are not causing the spike. I think if gas goes to $10 (i.e., oil above 200), demand may be impacted. Though my economic skills are lacking, I have a relatively good understanding of gambling and probabilities (in my mind at least). To me, the futures market is gambling and I know that the more people who bet on the favorite, oil, causes the payout to decline on such bet either via the line or money pool. I guess if this theory was applied to oil, the spot price should decrease, reducing the pay out on the long positions though that clearly is not the case though perhaps, the price of oil would rise faster without speculators. I have always believed rightly or wrongly, the only way to manipulate the oil market was to hoard above ground supply (which does not seem to be occurring) or limit supply. I also have always believed that speculators provide liquidity to the markets and without them, prices may increase at a higher rate due to the increased cost of hedging. However, I also, know from economics, that the more people who buy a product of limited supply, results in price increase. What I would suggest is demand may be inelastic on the down side but elastic to the upside and with dollars being flooded on the markets, the only result that can obtain is increased oil prices regardless of the speculators though I am obviously confused.

There are innumerable opportunities available to an individual who has positioned himself successfully amongst assets classes. Income streams from various types of investments ensue to the informed investor so that being diversified enables him to continue without disruption. Having no pressure to buy or sell in any of these arenas buy to wait patiently on the sidelines and pounce as appropriate investments come to your doorstep is a sign of an astute investor. As a consumer, this is an ideal time to scoop up bargains and negotiate deals with wholesale vendors on with cash sales. As an employer, there is keen competition amongst employees especially whose skills are widespread!

Favorable situation for the USA, with the rise in food and energy, we have plenty of both. And our delivery system is the best.

Amazement, astonishing when we consider oil to run at $150/per and we still increase our value.

“Let them buy food”
“coal”

WSW: though I respect and understand your investment philosophy, that very same philosophy suggests unless you believe the value of the assets you currently hold are going to appreciate in the medium term (say about a year or so) and not decline much further, you should sell your declining assets and buys those you believe will appreciate on a selective basis though perhaps, this is what you are doing. I think many investors take CNBC bulls too seriously and have a goldilocks view of the economy in the face of all evidence to the contrary. I guarantee most of the bulls are not buying stocks in the lagging industries but rather selectively purchasing defense, energy, commodity, foreign and certain tech companies as opposed to holding the normal S&P type staples. In fact, I would recommend, if you believe McNasty will be elected, which I do, Carlyle Group is a great vehicle from which to profit due to all their inside connections (though stay away from their leveraged funds). Or look at the lobbyists connected to McNasty and on a selective basis buy the companies such lobbyists represent, McNasty is exponentionally tied too special interests in relation to Bush and look how well Bush has done for his Clan (many of whom overlap with Mcnasty).

Kafka..You make some excellent observations!

Disagree with the outcome of the election.

Am selective in the industries you outline. Averaging in regularly.

Commercial real estate holding up remarkably well.

I am fortunate in that there is no measurable decline in all of my holdings. Making a few bucks!

WSW: Cograts, though I hope you are wrong on McNasty, I loaded up on Intrade with 3 to 1 odds that McNasty would win because I have faith that this country will never elect a brilliant Harvard Law Grad president and I am sure more radical lefty association smears will come out. If I am wrong, my short bets on the dollar will look even better because if Obama is elected, it is ball game over for the dollar not that McNasty would be much better (and most likely worse in the near term). If I thought Obama was going to be elected, I would load up on Berkshire Hathway affiliated stocks and certain Pimco Funds because all Warren and Bill care about is making a buck and they must be supporting Obama for some reason. I got rid of most of my real estate in 2005 and 2006, we shall see what happens though I wish you the best returns.

The Western financial crisis means the fast-growing economies of Brazil, Russia, India and China will grow their share of the world economy even faster than originally forecast,according to Goldman Sach.According to GS analyst O’Neill “This is a financial crisis of the West and we must not forget that of the world’s 6 billion people most of them are not affected by this,” he said. “I was in India four weeks ago and there were no signs of India being affected by all of this.”

WSW,
although i agree with your approach in general i will reming you what j.m keynes says: “Long run is a misleading guide to current affairs. In the long run we are all dead”. so keep that in mind and dont build a directional bias and as henry ford says: “put yourself in the other person’s shoes and view the world from his side (and frame of mind)”. that should help you exploit better any opportunities and maximize your results.

Kafka,
i might be wrong but this is my take on futures: since there are always 2 parties (long&short) for each contract the market is always in equilibrium. longs simply bet that in the future there will be more longs coming to the market than shorts and that will keep the price growing. it really has nothing to do with supply and demand as only 1% of all contracts are physically settled (as per nymex). enforce physical settlement for all contracts and here is what will happen: speculators will have to negotiate with ship,rail owners transportation, with oil depots storage, then will have to look for market for their oil. since all those will add demand for real services it is normal…

…to expect that those services will rise in price as well. that is something that the present futures contracts dont reflect, they are marked to market,failing to realize that they too have real impact on the final price. and if there is no reail capacity to accomodate september delivery for west texas intermediate would they just halt trading it? no. then does the price reflect real demand and supply and ability to supply? no.

so how come we are being hit at thepump? because of hedging. when joe the gas station owner or his franchise ‘hedge’ in the market they hit us and allow speculators to front run them by coming with hot money before those knuckle heads put aside enough cash to hedge themselves. again, i might bewrong but this is my simplified view on how things work in the oil futures world.

I like reading the “Psychologyofthecall.blogspot”, and I will raise rates to destabilize the greenback and the Bush administration, as Obama will be easier to deal with. Please go to the blog and vote for the next United States President ..

That blog spot is pretty educational, thanks Jean-Claude ..

bb… I am baffled by the meaning of your comment to me. Please clarify.

bb: very interesting and that makes sense but without speculators wouldn’t hedging become more expensive due to liquidity issues and implicitly lead to hoarding which yet again would drive the spot price up?

So much has been said about speculation in oil however, no one has really identified as to what is the percentage of speculation as it relates to the price of a barrel of crude. And who are the “big speculators” This is a rhetorical question in that I believe speculation is relatively small in comparison to supply available and the demand push.

The below is from the CFTC web site. It talks about how cash prices are set using future prices. Investment banks exempt from future contract limits could have an impact as does the perception of future supply and demand.

“Futures contracts are often relied on for price discovery as well as for hedging. In many physical commodities (especially agricultural commodities), cash market participants base spot and forward prices on the futures prices that are “discovered” in the competitive, open auction market of a futures exchange.

This price discovery role is considered an important economic purpose of futures markets. …”

Learn about Glass-Steagman Act that Clinton and the Republican Congress wiped off the books.

Too little regulation exists for oil futures markets. US regulators let also offshore oil market participate in oil speculation. Indices oil trading is also manipulating oil prices. Prop shops are also grouping together and attaking hard. Algotithm players who eliminate most human participation and let their proprietary software do all the trading. Wall street has a tendency of moving in herds, and now they’re investing heavily in energy. IF WORLD GOVERNEMENTS DON’T DO ANYTHING TO REGULATE THE FUTURES MARKETS A TERRIBLE FUTURE FOR HUMANITY AWAITS US. The major players in these markets are flushing out the smaller player. The play field is not level anymore and it is the hand of the few

Kafka
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How are you fooling the 700 characters limit imposed to many people in this forum????
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?????

WSW,
buffet preaches to invest for the long run and ignore price fluctuations in the short. either by increased implicit value or by increased money supply we have seen in the past 100 years everything has gone up. only since the gold standard was abolished the dollar has lost 95% of its value. i think though that buffet’s rationale behind his ‘long term’ aproach is mere ezploitation of the tax code: by holding long term (>1 year) bush has lowered his cap gains tax. further the irs allows to avoid any tax on substitution stocks: you purchase ford, make some profit and then flip it for gm. thus you avoid the gains tax, either 30 or 15%.

….his idea was that even a deep recession will not likely bring stocks more than 30% down. but if you focus on simply exploiting general economic cycles trends, you can always do better by saving yourself the declines (or hedging them by shorting the index) and still enjoy the same benefits.

Kafka,
you are right that specs add liquidity. but in my view they only magnify the small/big guy problem in futures markets: oil producers take advantage from oil retailers, conversely grain producers are being hoarded by big consumers. to me, quite frankly, there isn’t a clear resolution to this poblem in the future markets and it hits everyone in the wallet. would we be better off just looking at david fighting golliath or addind another bunch of people who always jump on the side of the stronger one in the moment??? it does not really change the outcome just brings the fight closer to end.

Sell Italian bonds. Italian public debt has reached a record high at 1646,7 billion euros.It is worse than 1992 when the country went very near to declare default(insolvency)

bb….I do not invest necessarily for taxation purposes as the chief motivating proponent but only keep it in mind as I make my transactions. Never make taxes the bulwark of your investing mantra.

Question: my word program corrects both spelling and grammar. I type comments on it and copy to blog quickly. I was not even aware of character limit.

BB: I thought that the cap gains exclusion rule only applied to small cap type stocks and government insiders adjusting their portfolios when taking government jobs? Are you suggesting speculators are not causing the spot price increases per se but rather pushing the price where it was going to end up anyways? That is what I believe but then again I listen to Kudlow.

If anyone wants to make a quick buck when trading opens this afternoon, if AUD is above .9630, short it with stops above .9675. Over the last month or so it has bounced at least 10 times from this range to below .9600 with only a couple times going above .9650 and never above .9669 and always a retracement to below .9600. Slow stoch is overbought and upper bollingers are in view. I sold over weekend at .9635 on news that Iran was responding to nuclear proposals and decline in gold on Friday, looks like Iran is only stalling and not much movement in thin markets as AUD is currently at .9631 but it should be an easy 10 to 20 points. I am also long yen at 106.68 (down about 11 points right now) but the charts say it is a sell and 107.40 should provide a nice backstop, lately yen seems to be inversely correlated to AUD which does not make sense but perhaps, results from impact on AUD/JPY crosses being unwound or bought, in any event it serves as a nice hedge against AUD lately. Though the probabilities are high, trading in thin markets is risky and you could lose it all, watch closely news releases from FT, Barrons and Reuters.

It is becoming more of a challenge to be competitive in the racing industry given an increasing number of smaller stables folding and or consolidating. Discretionary spending and gambling at the various racetracks have decreased especially the smaller ones which leads to smaller purses. Expenses have increased with higher cost for feed, etc. Attendance at the tracks has fallen dramatically and betting likewise both at the track and off track which impacts purses. And so, life goes on!

WSW

Overall, racing has been on a big up tic.

New tracks and higher purse have been more the norm, lately.

Not as many people at some tracks, due to many off track sites and the Internet availablity for gambling. The Net takes in a large part of the busness.

This coming Wednesday, Thursday, and Friday night at 10 PM Eastern time, the Discovery Channel is doing a documentary on China, hosted by Ted Koppel.
Looks like much of it will be devoted to energy consumption.
Also looks to be high quality from previews and reviews.

The real rulers in Washington are invisible, and exercise power from behind the scenes.
);
Justice Felix Frankfurter

We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.
);
Justice Louis D. Brandeis

We have before us the opportunity to forge for ourselves and for future generations a new world order, a world where the rule of law, not the rule of the jungle, governs the conduct of nations. When we are successful, and we will be, we have a real chance at this new world order, an order in which a credible United Nations can use its peacekeeping role to fulfill the promise and vision of the UN’s founders.
);
George Herbert Walker Bush

OPEC president Khelil didn’t have anything nice to say about the dollar today. He seems to be reminding us that OPEC has us by the balls, in case we were wondering. Iran is clearly sending us the same “up yours” in their weekend statement. Of course we are powerless over Iran also, although Bush Inc. would be more than happy to send oil into the stratosphere to prove what a witless cowboy he is. I see a dollar slide across the board, I’ll put a little bet on it. As for equities, I’m still waiting on the sidelines. I have an uneasy feeling the oil problem is just beginning.

Uh NWO dude, Daddy Bush is one of the rich invisible dudes the quotes from the two justces above were referring to.

Skate… I respectfully disagree. I have been part of this industry for the past 40 years and I have never seen it in as worse condition as it is today. Many race tracks are offering Las Vegas type gambling at its plant in order to bolster its attendance and to maximize its profits in order to maintain interest of horsemen through higher purse distribution.

Larger stables are holding their own and turning a decent profit but smaller ones (mine) are struggling to keep the lights on!

The Federal, and the international crooks and its fractional lending schemes have bankrupt America. Iran, N. Korea, Venezuela, and formerly Iraq all had sovereign Central Banks.The Federal Reserve Board wants to control these countries ability to print debt based currency, and gold is the ultimate enemy.

On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest.

On that day President John F. Kennedy signed Executive Order No.11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve.

Executive Order No.11110
AMENDMENT OF EXECUTIVE ORDER NO. 10289 AS AMENDED, RELATING TO THE PERFORMANCE OF CERTAIN FUNCTIONS AFFECTING THE DEPARTMENT OF THE TREASURY.

MR. Kennedy’s order gave the treasury the power “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the treasury.”

This meant that for every ounce of silver in the U.S Treasury’s vault, the government could introduce new money into circulation.

In all, kennedy brought nearly $4.3 billion in U.S. notes into circulation.

With the stroke of a pen, Mr. Kennedy was on his was to putting the Federal Reserve Bank of New York out of business.

If enough of these silver certificates were to come into circulation they would have eliminated the demand for the Federal Reserve Notes.

Tis is because the silver certificates are backed by silver and the Federal Reserve notes are backed by anything but debt and the citizens ability on pay income taxes for interest payments.

Executive Order No.11110 gave the U.S the ability to create its own money backed by silver.

President Kennedy was assassinated just five months later.

No more silver certificates were issued.

Executive Order No.11110 was never repealed by any U.S. President and is still valid.

No President since has utilized it.

Nobody and I mean nobody is going to stop oil from reaching $250.00. We’re long oil, so all you get used to paying us a fee for the use of our oil. It’s our oil we can charge whatever I want. Prepare to make us forever richer. Our oil gives us the right to own all you. Call us cruel or whatever you want this is survival of the fittest. If you have oil, you rule the world, and we love having this power; with our millions of barrel of oil acquired with leveraged money - yes using other people’s money and proud of it, we’re one of your many new masters. Oil rules, to $250 per barrel!!!

Kafka, good call on the AUD/USD.

Yeah, though I am sure to get screwed one of these days on the AUD. I just took small 10 point profit but will reload if it goes into high 30s or buy if in low teens or lower depending on stochastics. If GBP goes into high 30s before going into low teens, I am selling for what should be an easy 15 points. I just wish I could figure out the yen, the experts say it is a sell against the dollar at 107.10 but I am already in at 106.68. If yen goes to 106.65, I am buying and playing both my offsetting positions against each other probably taking the long off in the high 80s or short off in the 50s based on whichever position crosses over first. If EUR/JPY goes into low 167.40s before going into the 80s, I am buying for a quick 10 points unless Euro is above 1.5710 (which I will short in the high teens if it has not gone below 1.5790). I just got an easy 12 points on EUR/JPY when it went into the 70s.

Guys, it’s speculation that is driving up the price of oil. I don’t care what the so-called appoligists say about the price being more demand, peak oil, or whatever.

Simple math.

Dollar is worth 20% less than a year ago. Last year’s price 60 bucks a barrel. That means, this year, it should be 72 bucks a barrel.

That doesn’t explain the 60 dollar premium on each barrel of oil. Some say it’s demand from China and India. Ok, their economies grew about 10% each, so let’s say it’s now 87 bucks a barrel. What else? War with Iran? Problems with Nigeria? Ok, give it another 20 bucks a barrel. That’s 107 or so.

130+??? It’s speculation guys. It’s greedy industrialists and financiers who are moving out of the real estate market and into the commodity market.

Congress and the President should have all right to go to war or use military completely stripped from them. Massive funding for education on politics, foreign policy, worldwide religions, cultures, and economics most importantly, are in order so that this “power in the right hands” ideal can be realized. Organize and educate yourselves - there aren’t as many rich people than there are us middle class.

Get in on the oil wagon, use other people’s money - its a great game change worthless paper for a real product that all nations need. Become transnational, if this fail just move somewhere else, your oil will be your passport, you have oil you own the world. Lots of equity is being dumped to hege against a failed globar economy. If you own oil you will be the master of the world. Join the party buy oil. Whether oil is in a speculative bubble we don’t care, oil guarantees us that we will rule the world, and we’re going to take it to $250.00!!!

OIL NEWS: OPEC Chief Sees Higher Oil on Weak Dollar Singapore, July 07.
Opec president Chakib Khelil warns that oil prices will continue to rise because
of the falling US dollar. 1% fall in the dollar means US$4 more on the price of
oil, added Mr Khelil, who is Algeria s minister of energy and mines, told the
independent Algeria-News yesterday. As producer countries we think that the
current supply is sufficient, he added. Khelil further added he believed that
60% of the rise in oil is due to the fall in the exchange rate of the USD and to
geopolitical problems nd 40% to the intrusion of bioethanol on the market.

Where is a Central Bank or Fed mentioned?

U.S. Constitution - Article 1 Section 8
Article 1 - The Legislative Branch
Section 8 - Powers of Congress

>

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and Post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

To John at 7:23 PM:
You say it’s speculators. What about China?
I have to wonder this: if China was still a true commie nation a la Mao, they’d still all be riding around on bikes in cities with few buildings.
Not to mention India.
Everyone has an opinion on the cause of crude oil/energy prices, but there are so many variables influencing the price that it’s impossible to point at any one aspect.
I’ve traded grain futures and options since 1995 from home, and every analysis or price forecast o