Friday 27 June 2008

Oil Hits Record above $142 a Barrel; Libya Talks of Cutting Production

FT.COM: Oil prices extended their record breaking run on Friday after pushing above the $140 a barrel level for the first time in the previous session, driven higher by a cocktail of supply concerns, dollar weakness, inflation fears and turmoil in equity markets.

Nymex August West Texas Intermediate hit a hit a record $142.26 a barrel before easing back to trade $2 higher at $141.64. ICE August Brent surged to a fresh peak high of $142.13 a barrel, before edging back to stand $1.27 higher at $141.10 a barrel.

Oil prices rose by more than $5 a barrel on Thursday after Libya threatened to cut its oil production and Opec’s president warned that prices could surge as high as $170 a barrel this summer.

Shokri Ghanem, Libya’s top oil official, said the country was considering reducing oil production in response to a bill before the US Congress that would empower Washington to sue Opec members for cutting supplies. Oil Hits Record above $142 a Barrel >>> By Chris Flood | June 27, 2008

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Thursday 26 June 2008

The Shrinking Influence of the US Federal Reserve

SPIEGELONLINE INTERNATIONAL: Humiliation for Mr. Dollar: Ben Bernanke, the chairman of the United States Federal Reserve Bank, faces a general investigation by the International Monetary Fund. Just one more example of the Fed losing its power.

The United States Federal Reserve Bank, or Fed, seems as much a part of America as Coca-Cola or Pizza Hut. But at least one difference has become apparent in recent days. While the pizza chain and soft-drink maker are likely to expand their scope of influence in the age of globalization, the US central bank is finding that its power is shrinking.

No Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing. The Shrinking Influence of the US Federal Reserve >>> By Gabor Steingart in Washington | June 26, 2008

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Wednesday 25 June 2008

Zwanenberg Plumps for Eternal Dhimmitude

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Poster of Dutch-Danish products boycott

“Zwanenberg announces its solidarity with the ‘Messenger of Allah Unites Us Campaign’ in its endeavours to pass an international legislation to stop any insult of any religion including Islam and Prophet Mohammad (PBUH)” – Zwanenberg announcement

THE JORDAN TIMES: AMMAN - The multilateral Danish-Dutch boycott campaign is moving ahead with the addition of a major brand, the removal of others and an ongoing lawsuit, while Jordanian importers still suffer losses.

Launched in late February to protest against the republication of disturbing cartoons of the Prophet Mohammad, “The Messenger of Allah Unites Us” campaign was relaunched in mid-June to add products from the Netherlands after Dutch MP Geert Wilders posted an anti-Islam film on the Internet.

The ultimate goal, according to campaign spokesperson Zakaria Sheikh, is to enact a universal law that prohibits the defamation of any prophet or religion, similar to the international legislation banning anti-Semitism.

Sheikh told The Jordan Times that the boycott will assist them in providing proof of the harm of “hateful messages” when advocating for the law. Boycott Campaign Moves Ahead >>> By Linda Hindi | June 25, 2008

Diana West: "The Islamic strategy to compel the suicidal West to destroy its own identifying liberties by exploiting capitalism's essential weakness – blithering fear of shrinking markets – continues apace with renewed calls for an Islamic boycott of Dutch and Danish goods." >>>

Zwanenberg Food Group >>>

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Monday 23 June 2008

Dutch Companies Fear Jordanian Boycott

RADIO NETHERLANDS WORLDWIDE: Fearful of a Jordanian boycott of their products, two Dutch companies have distanced themselves from the film Fitna, produced and released earlier this year by Freedom Party leader Geert Wilders. On Sunday, Friesland Foods and the Zwanenberg Food Group placed adverts in Jordanian newspapers to announce that they have nothing to do with the film. They're hoping to prevent their products ending up on a Middle East blacklist.



They took this step after 'The Messenger of Allah Unites Us', a broad coalition of Jordanian political parties, professional organisations and media, printed one million posters showing Dutch and Danish products that - they argue - consumers in Jordan and other Middle East countries ought to boycott. In addition to a number of Danish brand names, the list includes such Dutch companies as KLM, Philips and baby food manufacturer Friso.



There's considerable anger in Jordan regarding Danish cartoonist Kurt Westergaard and Dutch politician Geert Wilders. The chairman of the coalition, Zakaria Sheik, says that both men have offended Muslims throughout the world and shouldn't escape their punishment. Dutch Companies Fear Jordanian Boycott >>> By Sebastiaan Gottlieb | June 23, 2008

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Getting the French to Work

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Photo of Christine Lagarde courtesy of the BBC

BBC: Christine Lagarde, the country's first female minister for finance and the economy, says it is time for French people to "roll up their sleeves" and stop thinking about holidays.

The former international lawyer, impressed by the work ethic during her time in the US, is intent on instilling the same spirit in her countrymen and women.

Her approach is calm and conciliatory, bearing little resemblance to the fire and brimstone of her boss, Nicolas Sarkozy.

Yet Christine Lagarde shares the president's convictions when it comes to the French and the world of work.

Until three years ago she was chairman of the law firm Baker and McKenzie, whose main offices are in Chicago.

Her entry into French politics was sudden.

Called up by the former government of Dominique de Villepin, she left the US on a Tuesday afternoon and was at her desk as trade minister the following morning. Getting the French to Work >>> By Alasdair Sandford, Paris | June 22, 2008

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Saturday 21 June 2008

The Game Is Up! Saudi Arabia Invited to Invest in British Nuclear Power Stations

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Photo courtesy of The Telegraph

THE TELEGRAPH: Gordon Brown has invited oil-rich states like Saudi Arabia to invest in the next generation of British nuclear power stations.

The Prime Minister extended the invitation to OPEC members as part of a deal he will propose at a summit in Saudi Arabia on Sunday. 



Mr Brown said he wants oil producers to allow Western energy firms to invest in their fields, increasing OPEC's extraction and refining capacity. 



In exchange, he said, Western oil-consumers led by Britain should open their economies to investment from oil-states' sovereign wealth funds. In particular, he said, sovereign funds should be encouraged to invest in alternative energy sources, including nuclear power.

The government has signalled its willingness to license a new wave of nuclear power reactors in Britain, but there are doubts about the energy industry's appetite for funding new stations. Gordon Brown Invites Saudi Arabia to Invest in Britain's Nuclear Industry >>> By James Kirkup in Brussels | June 21, 2008

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Thursday 19 June 2008

EU losing World Rôle, Has Weaker Leaders - Italian PM

THE GUARDIAN: ROME, June 19 (Reuters) - Italian Prime Minister Silvio Berlusconi attacked the European Union on Thursday, saying it had lost influence on the world stage and its leaders were weaker than when he was last in office two years ago.

Speaking before an EU summit in Brussels, Berlusconi also criticised European Commissioners for speaking out publicly and creating problems for national governments, and said he would demand a more reserved approach from now on.

"I see a Europe which has gone backwards compared with two years ago," Berlusconi, who became prime minister for the third time following an April election victory, told a business conference in Rome.

He said Europe's current leaders had "less personality" than those attending summits when he was last in office, citing Tony Blair, Jose Maria Aznar, Gerhard Schroeder and Jacques Chirac, the former leaders of Britain, Spain, Germany and France.

"The EU appears as an institution that intervenes with obligations and restrictions," Berlusconi said in his latest broadside against the institutions of the 27-nation bloc. "It is not a protagonist on the world stage."

On Wednesday he blasted the EU for having done "absolutely nothing to stop the hypervaluation of the euro", and promised that he would use the EU summit to make the area "less bureaucratic and less distant from citizens". EU losing World Role, Has Weaker Leaders-Italy PM >>> Reuters | June 19, 2008

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Wednesday 18 June 2008

Bush Calls for Offshore Drilling

Watch BBC video: President Bush calls on Congress to lift the ban >>>

BBC: President George W Bush has called on Congress to end a 27-year ban on drilling for oil in US coastal waters, to reduce dependence on imports.

Mr Bush said existing restrictions on offshore drilling were "outdated and counter-productive".

His move comes as US consumers are calling for action to tackle high oil prices that have pushed prices at the pump to more than $4 (£2) a gallon.

US energy needs are set to be a key issue in November's presidential poll.

Republican John McCain favours offshore oil drilling, whereas his Democratic rival, Barack Obama, opposes it. Bush Calls for Offshore Drilling >>> | June 18, 2008

Cross-posted at A New Dark Age Is Dawning >>>

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President Barack Obama Would Be Bad for Britain

THE TELEGRAPH: If this country's voters could vote in America, John McCain could take the summer off. So thorough would be his drubbing that no campaigning on his part could save him from an enforced return to the Senate.

As British and most other foreign observers see it, Barack Obama is the second coming. Perhaps not of you-know-who, although in his victory speech Obama did describe his triumph in the primaries as "the moment when the rise of the oceans began to slow and our planet began to heal".

Moses made the waters recede, but he had help. So Obama must be the second coming of JFK. Never mind that Kennedy sent troops to Vietnam, backed an abortive invasion of Cuba, and conveyed such a sense of inexperience and weakness at his summit with Kruschev that we almost stumbled into a nuclear war when the Russian leader decided he could get away with putting some missiles in Cuba. President Barack Obama Would Be Bad for Britain >>> By Irwin Stelzer | june 18, 2008

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Tuesday 17 June 2008

Inflation Hits 16-Year High as Financial Squeeze Intensifies

THE TELEGRAPH: Inflation has soared to a 16-year high, climbing to 3.3pc, as the full effects of higher food, utility and petrol prices hit home.

Figures out this morning from the Office of National Statistics show that the Consumer Prices Index - the Government's preferred measure of inflation - jumped from 3pc in April to 3.3pc in May.

This was above economists' expectations and the highest level since 1992, the year when Britain was humiliatingly forced out of the European Exchange Rate Mechanism and interest rates hit 15pc.



It is only the second time since the Bank was granted independence in 1997 that inflation has climbed more than one percentage point higher than 2pc - the Government's target. Inflation Hits 16-Year High as Financial Squeeze Intensifies >>> By Harry Wallop, Consumer Affairs Correspondent | June 17, 2008

THE TELEGRAPH:
Deflation Rather than Inflation Could Soon Be Our Big Worry >>> By Roger Bootle | June 17, 2008

The Dawning of a New Dark Age (Paperback - UK)
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Monday 16 June 2008

The Price of Crude Oil Hits New High

BBC: The price of crude oil has hit a new high of close to $140 a barrel in New York trade, despite Saudi Arabia agreeing to increase output in July.

US light crude rose to a record high of $139.89 a barrel, surpassing the previous high of $139.12 set on 6 June.

The price later fell back in afternoon trade to $134.57 a barrel.

On Sunday, Saudi Arabia had said it would increase its oil production by 200,000 barrels a day next month in a move to meet growing world demand.

That would make a total rise of 550,000 barrels a day, or over 6%, since May and would take Saudi output to its highest monthly rate since August 1981.

The news was announced after UN Secretary General Ban Ki-Moon met Saudi Oil Minister Ali al-Naimi in Jeddah for talks on the high oil price. Oil at Record Near $140 a barrel >>> | June 16, 2008

The Dawning of a New Dark Age (Paperback – USA)
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Sunday 15 June 2008

Saudi Oil Output to Rise in July

oil
Photo of the Saudi Oil Minister, Ali al-Naimi, courtesy of the BBC

BBC: Saudi Arabia will increase its oil production by 200,000 barrels a day next month, its oil minister has told the United Nations.

The news was announced after UN Secretary General Ban Ki-Moon met Saudi Oil Minister Ali al-Naimi in Jeddah during a one-day visit on Sunday.

Last month, the Kingdom increased its production by 300,000 barrels a day in an attempt to bring down high prices.

It argues soaring prices are caused by speculators rather than oil shortages.

Oil prices fell by almost $2 on Friday after reports that Saudi Arabia might boost oil production. US light, sweet crude was trading at $134.86 in New York.

Speculative factors

After an earlier meeting with the Kingdom's King Abdullah, Mr Ban said Saudi Arabia, the world's biggest oil producer, viewed current prices as "abnormally high". Saudi Oil Output to Rise in July >>> | June 15, 2008

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Friday 13 June 2008

Support for Euro in Doubt as Germans Reject Latin Bloc Notes

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Photo of euros courtesy of Google Images

THE TELEGRAPH: Notes printed in Berlin have more currency for bank customers who fear a 'value crisis'

Ordinary Germans have begun to reject euro bank notes with serial numbers from Italy, Spain, Greece and Portugal, raising concerns that public support for monetary union may be waning in the eurozone's anchor country.

Germany's Handelsblatt newspaper says bankers have detected a curious pattern where customers are withdrawing cash directly from branches, screening the notes to determine the origin of issue. They ask for paper from the southern states to be exchanged for German notes. 



Each country prints its own notes according to its economic weight, under strict guidelines from the European Central Bank in Frankfurt. The German notes have an "X"' at the start of the serial numbers, showing that they come from the Bundesdruckerei in Berlin.

Italian notes have an "S" from the Instituto Poligrafico in Rome, and Spanish notes have a "V" from the Fabrica Nacional de Moneda in Madrid. The notes are entirely interchangeable and circulate freely through the eurozone and, indeed, beyond.

People clearly suspect that southern notes may lose value in a crisis, or if the eurozone breaks apart. This is what happened in the US in the Jackson era of the 1840s when dollar notes from different regions traded at different values.

"The scurrilous idea behind this is that if the eurozone should succumb to growing divergences, then it is best to cling to most stable countries," said the Handelsblatt. Support for Euro in Doubt as Germans Reject Latin Bloc Notes >>> By Ambrose Evans-Pritchard | June 13, 2008

The Dawning of a New Dark Age (Paperback – USA)
The Dawning of a New Dark Age (Hardcover – USA)

Thursday 12 June 2008

New Cities Rise from Saudi Desert

Good news for the Saudi economy, no doubt. Now, all the Saudis will have to do is modernize their mediæval mindset to go with these ultra-modern developments and cities! - ©Mark

Watch BBC video: Inside the desert city >>>

"…labourers [mostly from Asia] are cheap and are prepared to do jobs that Saudis refuse to do."


BBC: King Abdullah of Saudi Arabia has a vision which if successful could soon transform the Kingdom's economy and society.

Six major developments will be built across the Kingdom over the next 15 years, the centrepiece being King Abdullah Economic City, 100km (62 miles) north of Jeddah.

The new city is rising from the sands of the Arabian Desert and when complete it will stretch over 150 sq miles (388 sq km).

The developers say that by 2020 more than one million jobs will have been created, in a city that will be home to two million people.

"This is on a scale unheard of before in the world," said Fahd al-Rasheed the CEO of Emaar, The Economic City, which is developing the site.

"[The King Abdullah Economic City] includes one of the largest ports in the world, an education zone, a resort zone etc. It is the size of Washington DC and is being built in 15 years".

Diversification

With the price of oil showing no sign of weakening, the government of Saudi Arabia is planning for a future when the commodity will eventually run out.

The revenues that are being generated are enormous - every day more than 11 million barrels of oil are pumped. At current market prices that is worth well over $1bn (£510m) daily.

During the last oil boom, vast sums of money were spent by the government on projects that failed - Saudi Arabia famously tried to "make the desert bloom" with water-intensive agriculture schemes.
Now the Kingdom is trying to invest more sensibly in the future to solve several challenges:

• Diversification of the economy
• A booming population (40% of Saudis are under 15)
• Growing unemployment
• Improving skills and education amongst Saudis

New Cities Rise from Saudi Desert >>> By Crispin Thorold, King Abdullah Economic City, Saudi Arabia | June 11, 2008

Cross-posted at A New Dark Age Is Dawning >>>

BBC:
Saudi Arabia’s Dual Identity >>> By Crispin Thorold | June 19, 2008

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Tuesday 10 June 2008

Bush’s Empty Rhetoric on the Need for a Stronger Dollar

TIMESONLINE: President Bush issued a call for a rise in the value of the US dollar on currency markets yesterday in a signal of mounting official alarm in Washington about the effect of the slumping greenback on the world’s largest economy.

In an exclusive interview with The Times on the eve of the United States-European Union summit in Slovenia, Mr Bush expressed concern about the dollar’s continuing weakness and said that he favoured an appreciation in the US exchange rate.

“We want the dollar to strengthen,” he said on Air Force One as it crossed the Atlantic bound for the summit.

The President did not suggest that the United States was preparing to back its rhetoric on the dollar with any formal intervention in the exchange markets. He said that the “relative evaluations of economies will lead to that dollar strengthening”. President Bush Betrays Fears over Economy with Strong Dollar Call >>> By Gerard Baker and Tom Baldwin on board Air Force One | June 10, 2008

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House Sales Fall Worst in 30 years, Says RICS

THE TELEGRAPH: The number of houses changing hands has "collapsed" to the lowest level in 30 years, an influential housing market survey shows today.

The fall in sales far exceeds the depths of the last housing crash in the 1990s and is the lowest since records began in 1978.

The average number of houses that estate agents sold in the past three months was 17.4 - almost a third lower than a year ago, says the Royal Institution of Chartered Surveyors (RICS).



Its report also says that gazundering, the controversial practice of buyers dropping their offer price after they have agreed to purchase a property, has returned.

While prices have started to fall in earnest only in the past two months, the report makes clear that the property market is in a dire state.

Buyers are refusing, or unable, to hand over any money to purchase a house.

"The continuing lack of demand in the housing market is reflected in the collapse in transactions," says the report." House Sales Fall Worst in 30 years, Says RICS >>> By Harry Wallop, Consumer Affairs Correspondent | June 10, 2008

THE GUARDIAN:
UK Economy: Recession Fears Grow as House Buyers Vanish: City expects three rises in interest rates within months to curb inflation >>> By Larry Elliot, economics editor | June 10, 2008

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Monday 9 June 2008

’We Need to Give Up the Oil and Gas Drug’

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Photo courtesy of SpiegelOnline International

SPIEGELONLINE INTERNATIONAL: As oil prices hit one record high after another, and OPEC warns of $150 a barrel by the end of summer, economists are warning of global recession and inflation. But German commentators point out that high oil prices also have an upside.

Rising oil prices have been a matter of concern for months. There was much angst at the beginning of the year when oil hit the psychologically important price of $100 (€63) a barrel. But many analysts at the time warned that $100 was just the beginning -- and subsequent events have proved them right.

The price of oil broke yet another record on Friday, when the price jumped $11 -- the largest-ever increase in one day -- to over $139. Prices had eased slightly by Monday, but concerns remain. Many observers are making comparisons to the 1970s oil shock (more...), warning that current high prices could again lead to a long period of recession and high inflation. 'We Need to Give up the Oil and Gas Drug' >>> | June 9, 2008

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Britons Must Steel Themselves for a Sharp Fall in Living Standards

THE TELEGRAPH: Britons must steel themselves for a fall in living standards which could be as sharp and painful as in the 1970s, as the western world faces up to a new era of stagflation, a former Bank of England policymaker has warned.

Willem Buiter, one of Gordon Brown's first appointees to the Bank, said Britons face a "painful couple of years", and urged the Monetary Policy Committee to raise rates twice to cap inflation.

His warning followed Friday's chaotic day of trading on Wall Street, where oil prices soared more than $11 to a new record high just below $140 a barrel and the Dow Jones index of leading shares fell by 400 points. Investors expect a fraught day today as trading opens in Asia and Europe.

With the price of oil now higher in real terms than in the 1970s and early 1980s, economists warn consumers will have to absorb a similar amount of financial pain. Britons Must Steel Themselves for a Sharp Fall in Living Standards >>> By Edmund Conway, Economics Editor | June 9. 2008

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Saturday 7 June 2008

Oil Price Pushed to New Records as US Economy Plunges Further

THE TELEGRAPH: Dow crashes 400 points as US jobless rate climbs and prospects of war in Middle East grow, sparking worries of 1970s-style crisis

Fears the world economy is in the grip of a 1970s-style oil crisis sparked an almost 400-point plunge in leading US shares, the biggest one-day loss in 16 months.

The price of crude oil was catapulted $11.31 to a new all-time high of $139.12 in New York, its biggest one day gain in dollar terms on record, driven by an almost unprecedented rise in US unemployment and signs that Israel is preparing for outright conflict with Iran and on the Gaza Strip. 



The spike caused shares in the Dow Jones Industrials index to fall as much as 410 points at one stage, closing down 394.64 points at 12,209.81 – its worst loss since February 2007. In London the FTSE 100 closed down 88.5 at 5906.8.

On a dramatic day for equities and commodities, the New York Mercantile Exchange doubled daily price limits after heating oil contracts broke through original limits, leading to a short suspension of trading in some contracts.

The oil price has now risen more than $15 in the past two days alone, having doubled in the last year, undermining predictions the commodities peak could be ending.

Other commodities, including copper, aluminium and agricultural products, also rose sharply.

"This is just a plain old stampede," said Citigroup energy analyst Tim Evans.

"The sellers have basically pulled their orders so it doesn't take much incremental buying to push prices higher."

Kevin Norrish, a commodities analyst with Barclays Capital, said the oil spike represented Iran "coming back on to the radar screen."

"It's a rather nasty reminder that it hasn't gone away," he added.

A prominent Israeli cabinet minister, Shaul Mofaz, said that an Israeli attack on Iranian nuclear sites now looked "inevitable." Oil Price Pushed to New Records as US Economy Plunges Further >>> By Edmund Conway and James Quinn in New York | June 6, 2008

NEW YORK TIMES:
Job Losses and Surge in Oil Spread Gloom on Economy >>> By Peter S Goodman | June 7, 2008

FINANCIAL TIMES:
Oil Surges to Biggest Single-Day Advance >>> | June 7, 2008

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