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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: SliderOnTheBlack who wrote (90)	6/27/2005 1:52:17 PM
From: carranza2	Respond to of 50399

Interesting post, Slider. One question, however. With China holding well in excess of $250 bn worth of our T-bills/markers, which amount is growing steadily, what possible sense does it make to try to "break" China with crude? If they sell those T-bills in any kind of concerted manner to counter any seriously threatening act on our part, they can put a serious dent in our living standards, losing the Presidency and perhaps Congress for the GOP. I think you are right about the oil game. I think it is incredibly difficult to square today's prices with the available supply and prospects for lower Asian growth unless speculation and a security premium is not factored into the price. Either way, the price is bound to go either dramatically to the upside or downside but is unlikely to remain stable in the short run. Thus, your straddle strategy makes sense. However, because of China's monetary reserves are made up in a very large way by T-bills, I don't see the hidden hand of the US government trying to play political games with China using the price of crude as a weapon. Plus, the speculative edge of the price of crude is unlikely to be around in any long term sense.