The Saudii Prince is a Friend of US. In a letter to a friend I wrote, that Politically Oil should price between $20 and $25 per barrel. Yesterday the Saudiis said they have OPEC support to cut production, since they see overproduction and thus a lower price, but they are trying to sustain above $30 per barrel oil due to Greenspan's ill conceived Fed Rate hikes since last June 1999 that raised the price of the US Dollar, that is, by increasing rates, that caused the Saudiis to raise the price of their "money" which is Oil, and not just Oil oil, but Oil that they have always priced in US Dollars. To not do so would be a Gross Domestic Product (Saudi GDP) decrease in real revenue, they just protected their interests. This created the only real inflation that Greenspan outright lied to US as the excuse for raising rates FED DOUBLESPEAK. Greenspan is a nut, he only lowered rates yesterday because the Corporate conference with Jack Welch (GE) and all the high tech execs meeting with Bush, was for the purpose of placing the blame on the upcoming 2nd Greenspan Recession on Greenspan and the democrats, which is where the blame for this recession belongs, and Greenspan just acted to save face. Greenspan did not act to stop the 700,000 jobless claimants out of work these last two months, which will get worse before it gets it gets better, he acted for his own selfish EGO. He is a menace, only Rubin kept him in check, after the 1st Bush Sr endured the 1st Greenspan Recession, which palyed a political role in electing Clinton. The deep sixing of the US economy through Greenspan's outmoded monetary policy took away the modernization and sigma type efficiaency that we wuld have had with high tech prosperity, that, by its nature is a decentralized form of corporate management of supply and demand chains to drive the economy. The only centralized control of the economy left on this planet is the politburo in Communist Peking and the equally tyrannical Federal REserve under Alan Greenspan. Greenspan only seeks to help Asian communist slave economies, and he will only cut rates when and if forced. Bush needs to develop a comprehensive Tax cut policy along with an oil policy, and that oil policy in replenishing strategic petroleum reserves will have to take into account an accomodation to the Saudiis, who are the only nation that have their own department WITHIN the U.
S. Treasury Department for obvious reasons of US Currency flows balance of payments of Oil priced in Dollars. This means that every move by Greenspan, if he doesn't ease again, will need to be countered by the Bush administration undoing idiot Larry Summers failed ruination of "Europeanization" of the US Treasuries market from 30 year long bonds to 20 year bonds. This means printing money by re-issuing the discontinued 30 year bonds. This means a MONETARY WAR. The alternative is to allow Greenspan to remain as the only democrat centralized control element in a decentralized US Economy. Fiscal policy must combat Moentary policy. Oil will come down to the historic levels of $20 to $25 per barrel, and that means that all oil drilling and even EOM gas companies that otherwise had to pass the cost of oil on to the end user consumer, will have less MARGIN ON THE MARGIN, and ultimately less INFLATED REVENUES which is different from real revenues and real net earnings anyway, which means that the Greenspan artificially created inflated P/E ratios of these oil sector stocks will come down, and with that, the price of their stocks. This is happening now. Drugs stocks incidentally, are primarily based on organic chemicals that are a derivate of the petroleum industry, and likewise as their costs come down, so will the inflated price passed on to consumers and the same inflated price to earnings ratios of their stocks, which is what is happening right now. Drugs and Oil stocks are about to crash. They are down now. They are false safe havens, as the only real safe haven was CASH when CASH was king, which is what is was and still is while the Fed rates remain high. We need 200 to 250 more basis points (2% to 2.5%) decrease in Fed interest rates, to stop this Recession. Price/Supply/Demand applies to money just like it does to Oil and any other good or service. The higher the price, the less demand and less supply. Increase the Supply and you lower the price. This liquidity can be done by increasing MONEY in the hands of the taxpayers by tax cuts and by opening up greater oil supplys too. Think it out, and you will soon agree I think that Greenspan has to be retired.
I am,
truly your$,
-Crystal Ball |
