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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (53905)	10/2/2004 6:12:25 AM
From: elmatador	Respond to of 74559

Driving a huge SUV for the first time. Toyota Landcruiser feels like a truck. I was pondering -as I drove without a drivers license- gas price hits a record high closing and I am drving this moster thing! Anyway they prodcue a lot of it here, and can't increase the price because any time they try there's a riot. Diesel 63 Naira/L Gasoline 52 Naira/L 1USD=140 Naira.

To: energyplay who wrote (53905)	10/2/2004 6:12:51 AM
From: elmatador	Respond to of 74559

Jay, is the new economic is the commodities-driven economy? That proves you write. Money is going for tangible stuff! Markets / Commodities Print article \| Email article Record week for commodity prices By Kevin Morrison Published: October 1 2004 17:06 \| Last updated: October 1 2004 17:06 US crude oil futures punching through $50 a barrel for the first time ever caught most of the market attention this week, but it was not the only commodity to reach new highs. Lead, aluminium and UK gas prices also touched records, helping to push commodity indices to long term highs. ADVERTISEMENT The renewed focus on commodity markets follows recent economic data showing that the global economy is growing better than expected, causing the International Monetary Fund to increase its 2004 global economic forecast to 5 per cent, a rise of 0.3 percentage points on its previous forecast. This news gave industrial metal markets a boost, as high economic activity increases demand for metals such as copper and aluminium. Aluminium prices hit a fresh nine-year high of $1,857 a tonne on the London Metal Exchange, exceeding the previous long term high of $1,845 set in April. The benchmark three-month LME lead price hit a peak of $942 a tonne this week, its highest since the contract converted to a US dollar-denominated product from a sterling-denominated product in 1993. Copper jumped through $3,000 a tonne, a level the metal has only traded above a handful of times in the past decade while nickel prices have risen about 25 per cent in the past two weeks. "There has been a lot of fund buying in industrial metals on the perception that economic growth will continue at a relatively high rate," said Michael Lewis, head of commodities research at Deutsche Bank. Mr Lewis said metal prices are now close to breaking the highs struck in the mid-1990s and the late 1980s. The rise in metal prices is a sharp reversal after the steep slides seen in the second quarter following attempts by the Chinese government to slow their domestic economy. Although high energy prices have failed to impede economic growth, the threat to industrial activity remains with stubbornly high oil prices. Mr Lewis said the next key level for oil prices is $53.30 a barrel as this would push real oil prices, adjusted for inflation, to the levels immediately after the Iraqi invasion of Kuwait in 1990. Gold prices were also higher, although not because of any increase in demand for bullion, but on perceptions of further weakness in the US dollar. The two have had a close relationship for the past three years: each time the dollar goes down, gold moves up. This week it hit a five-month high of $419.50 a troy ounce, just $12 below the 16-year high struck 16 years ago.

To: energyplay who wrote (53905)	10/4/2004 1:05:31 AM
From: Taikun	Respond to of 74559

Hi EP, My point was that usually foreign reserves are held in proportion to the volume of trade by currency, not nation. If China has $290bn in reserves and $30bn in USD, then they are holding about 1/3 the USD in reserves they would if the USD holdings reflected the fact that 36% of their trade is USD. Why hold Euro if USD trade is larger? Of course I can see some shifting for spec or political purposes but reserves are often used to manage a currency for trade in that currency (whether it is the US or Mexico or Brazil)-and that would mean holding about 1/3 USD. So, I do not mean 'too much relative to trade', but too 'little USD relative to USD trade'. What would the other $260bn be then? If Euro that is strange as China trade in Euro is not 90% of their trade. If Yen, the same problem. Even half Yen and half Euro would leave them overexposed to changes in USD which would be proportionately larger than Yen or Euro. All I'm saying is Yiwu's data is $30bn, but based on US trade (if US trade is 36%+, USD trade would be even more), shouldn't it be more than 10% of $290bn? That's what an economist would say and that's why I'm questioning the $30bn. It seems too low. David