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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (108)	6/5/2001 4:14:19 PM
From: craig crawford	Read Replies (1) \| Respond to of 1643

Tuesday June 5, 3:15 pm Eastern Time Valero to cut runs unless exempted from Ca. blackouts NEW YORK, June 5 (Reuters) - Valero Energy Corp. (NYSE:VLO - news) said on Tuesday it would be forced to reduce production of gasoline and other distillates at its 130,000 barrel per day (bpd) Benecia refinery in California if it were not exempted from rolling blackouts this summer. A spokeswoman for the company said the planned blackouts, caused by an electricity crunch in the state, would force the plant to rely on back-up generators to avoid routine shutdowns, ``and we don't have the back-up generation to maintain full production.'' The company could not immediately estimate what percentage of its production could be maintained using its own generators, but said ``this would further tighten the gasoline market.'' The San Francisco Chronicle reported Tuesday that Chevron would also reduce runs at its California plants if refineries were not exempted from the planned blackouts this summer.

To: craig crawford who wrote (108)	6/6/2001 12:46:54 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 1643

Craig, First, let me thank you for the thread. You have put a lot of work into it and I appreciate it as a resource. I hope you have the stamina to keep it up. Let me just make my comments about the excerpt from the linked article: The huge upward movement for commodities in 1973 started first with a sharp decline for commodities, sharp increases of money supply and low interest rates and high economic growth. Money growth accelerated as savers were willing to buy securities worldwide. We all know what followed: the sharp increase of the oil price and other commodities triggered a spending frenzy, high volatility and high inflation. Today, the main difference I can see is the higher leverage. The lows for commodities are unprecedented. Also interest rates are at record low in some countries I have been looking for a bull market in commodities to begin for several years now. The big difference that I see between today and 1973 is that of inflation. I don't think any central bank in the world will let inflation run away like we did 30 years ago. Tight money will put an end to that. But I still think there can be a commodity inflation without a widespread inflation sufficient to draw central bank tightening. It just won't be the magnitude of the 70s bull market. The coming bull market, IMO, will be driven by economic growth, not a runaway monetary policy. Synchronized world growth has been illusive, but isn't out of the question in the not too distant future. Indeed the seeds of that growth will be sown in this slowdown as economies will be stimulated by monetary and fiscal means throughout the world. I look forward to reading this thread and maybe can make a comment on the subjects I know best.