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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (3590)	1/18/2006 1:18:41 PM
From: energyplay	Read Replies (1) \| Respond to of 217927

Hi Seeker - many "US companies" are effectively global companies which happen to retain US market listings and headquarters in the US because of the very large capital base of US markets. Often the majority of their employees, manufacturing, and sales have been outside the US since the 1960s or 1970s. Citibank is a good example, which much of their growth coming from Asia, investors from the Middle East (Alaweed etc.), software written in India, proprietary trading in London, and the bailout for their Latin American bad loans in the 1980s comming indirectly from the US taxpayer. Let's look at Newmont NEM - the worlds largest gold miner. It has been listed on the NYSE since 1925. The President is Pierre Lassonde, former head of Franco Nevada in Canada. Many of the properties and stockholders are from Austrailia. Headquarters are in Denver, Colorado. If we look at Ford and GM, we see companies which are heavily US with large non-US holdings. The US side of the business is in considerable trouble. Intel designs some of its' microprossors in Israel. So a decline in the quality of US schools is not the end of the world for them.... For Intel, Newmont, and many others, they are tied much more to the world economy than to the US. ***** The Dutch have been very heavy investors in the US - at one time the size of investments in the US was second only to the UK, which is about 8 times as large as the Nederlands. The Nederlands are small - and let's assume they don't want to invest in germany for certain historical reasons...

To: Seeker of Truth who wrote (3590)	1/18/2006 5:14:39 PM
From: Taikun	Read Replies (1) \| Respond to of 217927

There are two variables to a nation importing oil: spot rate and currency exchange rate If you're a nation and you import oil in USD you can't 'hedge' your exchange rate more than about 18mos out. Nations have to manage their energy supply and therefore they can't hold Euros when they need USD to buy oil. They have to hold some USD from, otherwise a crash in Euro means their economy grinds to a halt (particularly if it were to occur with a spike in oil prices). So, it's not about the spot rate for oil, its about reducing one variable (the USD exchange rate) and maybe buying futures they can mitigate the oil spot rate volatility (hence the advent of SPRs which works on the 2nd variable) Also, if a country simultaneously sells products in USD, holding some USD reserve shields them from exchange rate shocks that their exporters perhaps haven't hedged.