Friday, May 14, 2010

Oil down on economic worries, rising stockpile

Oil prices fell on Thursday for the third straight trading session, dragged down by economic concerns and rising U.S. petroleum inventories.

Front-month U.S. crude for June delivery settled down $1.25 to $74.40 a barrel, having earlier slid to $73.62, the lowest since February 12. U.S. crude prices have fallen in seven of the last eight sessions.

June's discount to July U.S. crude, widened in early trading due to rising inventories at the delivery point for the New York Mercantile Exchange's oil futures contract in Cushing, Oklahoma.

The spread blew out to nearly $5 -- the highest level since February 2009 -- in early trading, before narrowing later as short-covering lifted the front month. At settlement, the spread was $4.59 a barrel, up from $4.50 on Wednesday. (more)

Why The UK Is The Next European Country To Experience A Massive Debt Crisis

Now that the Greek debt crisis has been "fixed" by a gigantic pile of more debt, many are wondering which European nation will be next to experience a massive debt crisis.

Increasingly, all eyes are turning to the U.K. and their public debt that is spiraling out of control. The U.K. government's deficit is projected to be approximately 13 percent of GDP in 2010, which is even worse than Greece's 12.5 percent figure.

Right now the public debt of the U.K. is "only" at 68 percent of GDP, but three years ago it was sitting at about 40 percent, so as you can see the national debt of the U.K. is absolutely exploding in size. In fact, it is now being projected that the public debt of the U.K. will exceed 100 percent of GDP within the next three years. Considering the fact that citizens of the U.K. are some of the most highly taxed people in the world already, there just is not much room for raising more revenue. (more)

Gold Could Explode To $3,000 As Confidence In Currencies Collapses

Financial analyst David Rosenberg says gold could explode to $3,000 an ounce as European investors dump the ailing euro in exchange for the precious metal while JP Morgan states that bullion could face unlimited demand as panic buying ensues on the back of crumbling confidence in fiat currencies.

Rosenberg, chief economist at Gluskin Sheff, says the breakdown of the euro is extremely bullish for gold, especially in light of speculation that the ECB could be planning more quantitative easing (printing money).

“The case for gold heading to $3,000 an ounce is getting stronger by the day. The Euro has already broken below 1.30 to the U.S. dollar and there is plenty of room for additional decline going forward. It’s only at a one-year low — wait until it moves to a decade low,” (more)

The Panic Is On!

As the Great Depression of the 1930’s was getting underway, President Herbert Hoover refused to acknowledge it. In the weeks following the events of Black Tuesday, Hoover called the economy “fundamentally sound.” Months later, he still insisted that the strength of the American economy was “unimpaired.” However, by 1931 he could no longer hide the truth. With the economy in shambles, Hoover was forced to declare that America was indeed in a ‘depression’. He chose the word ‘depression’ because he believed it to somewhat innocuous and far less provocative than terms like ‘panics’ or ‘crises’ that had previously been used to refer to significant economic downturns.

That same semantic game is being played on us today. What we now call a ‘recession’ is what was known as a ‘depression’ back in the 1930’s. As economist John Williams explains: (more)

Economist Tim Madden: The PIIGS Brief: understanding how oligarchs rig, loot our economies. 4 of 4

Won’t fly in an international court or breach-of-treaty determination
The legal and equitable significance of the foregoing is to make it clear that the necessary defence of Canada and its courts/legal profession cannot and will not stand before an international court or breach-of-treaty determination proceeding.
At the initial level Canada is dead-in-the-water because under ss. 347(7) of the Criminal Code it provided for a scheme of dispensation under which it could, and subsequently did, permit mainstream financial institutions based in Canada to illegally and criminally convert interest-in-fact into pretended principal on the face of registered securities, so as to facilitate the general trade and traffic in securities so falsified. The general mechanism of the scheme was to trivialize the substance of the offence by unlawfully and illegally making criminal prosecutions subject to the selective consent of the provincial Attorneys-General, so as to bring down the full weight of the criminal law on an accused living human while concurrently aiding and encouraging commercial traffic in the same offences by corporate persons. (more)

Jim Rogers on Bloomberg 5/12/10: Gold has HUGE potential!

CEO Predicts Market Armageddon: Dow To 5,000

Cornerstone Wealth Management CEO David Hefty agrees with a growing number of other financial experts that a real estate collapse in China before the end of the year will send shockwaves through the global economy, leading to a stock market collapse which will send the Dow into free fall below the 5,000 level.

Although Hefty said that the Dow would push higher beyond 12,000 by July, the fact that the market is “still in complete denial of what’s going on around the world and here at home” would soon lead to a dramatic reversal, Hefty told skeptical CNBC hosts.

Hefty said that when the market turns it will go into a “complete free fall” mirroring the collapse in oil prices in 2008 and could push the Dow below 5,000 by the end of this year – which would represent a decline of around 60 per cent. (more)

Chart of the Day