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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures

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To: Chip McVickar who wrote (4280)	12/1/2004 3:40:23 PM
From: robert b furman	Read Replies (1) of 12410

HI Chip, I'm not as bullish regarding price of oil. Price of oil will be high (my # is 40.00/barrel). High prices bring out investors. Old oil projects that weren't justifiable now become justifiable.New projects will be ok'd as well:ANWR both oil and gas and Colorado oil sands plus HUGE reserves in Canada.Keep in mind we are the Saudi Arabia of Coal another alternative - but with high tech costs and scrubbers. The world is full of energy if at higher prices. Alternative Agri fuels are catching on globally corn in USA and sugar elsewhere. This bodes extremely well for the OIL PATCH. Keep in mind that the oil price has not impacted Europe as the Euro has gone up and now buys the the same barrel at a higher price.Current price now an equivalent price that Europe paid back in 2000/Ken Fischer. The oil shock that is most impactful is the USA where our weakening dollar doesn't go as far - if the price was constant let alone @ 50.00 per barrel. So big impact is in USA and our economy is leading the global growth. Bottom line oil is less than 2% GDP - used to be upwards of 6%. If there is a blessing in our manufacturing base dwindling and our economy becoming "service oriented - it is that we consume much less energy. The Energy consuming countries are the Asian countries(manufacturing base). IF their currencies devalue - it will kill their margins as cheap currency will buy less of an increasing price = Double whammy!! If asian currencies decline energy will break growth in Asia-reduce demand there . Net result of both Europe's scenario and Asian scenario is American manufacturing will be huge benefactor of weak dollar. As our manufacturing growth catches on (recipient of weak dollar) our energy efficient and pollution efficient manufacturers will rise to supremacy in global trade world. This is why I believe Chief's statement that the Dow divisor is so small - the world won't believe it. American manufacturing: highly internet based energy efficient lean "just in time supply chain "leaders will be heralded as best run companies on the earth! Oil will ultimately be the fuel of our supremacy and growth as long as weak dollar persists. Asian countries know and fear this and will exhaust all foreign credit reserves to protect their currency advantage and growth rates at home.(huge profits to be made on Asian currency declines just as has happened with Yen this year(also highly energy dependant manufacturing base). But in the end - US economy and its resources and balances will prevail. A very bullish scenario most likely 6 months plus out in the future. SHEESH - I've got to pollish my chrystal ball it turning red hot.GG Bob

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