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The Basement
hyper inflation in the USA?
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<blockquote data-quote="John Roberts" data-source="post: 23962" data-attributes="member: 126"><p>Re: hyper inflation in the USA?</p><p></p><p></p><p>Feel free to send me all your worthless dollars. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite1" alt=":)" title="Smile :)" loading="lazy" data-shortname=":)" /></p><p></p><p>Tension in the middle east is actually putting a bid under the dollar supporting it out of fear. There is a double whammy for oil prices, with supply uncertainty as we watch Gaddafi spank the rebels. One way or the other libya will eventually sell their oil to somebody, but the Saudis moving troops into Bahrain is not a sign of calm there. </p><p></p><p>The future of the dollar depends on several things. For the record 9% unemployment means 91% employment... not all that bad as a whole, unless you're in that 9%. That said it has an impact on the mentality of the 91% with pay checks so they are more frugal. Not completely a bad thing. </p><p></p><p>QE2 is due to stop soon, and economists are predicting US interest rate increases later this year, both of which should buoy the dollar. </p><p></p><p>Congress still can't shoot straight and pass a budget, for this year, let alone next year, and that is their actual job... arghhh. The good news is the arguments are now about how much to cut the deficit, and reducing spending instead of increasing borrowing. </p><p></p><p>So IMO what is going on in congress wrt spending right now will have significant impact on future dollar strength or weakness. </p><p></p><p>AG will take a hit, if congress figures out we can't afford to keep subsidizing ethanol, but the farm state lobby is strong. </p><p></p><p></p><p>I'm with you about increasing drilling here... It is inexplicable to me that we don't. </p><p></p><p>The SPR is for emergencies. Short term high prices are not an emergency, and are based on what the market thinks future prices will be. There is plenty of supply but smart people are betting it will go up in the future. I think they are probably correct considering our lame ass energy policy. Maybe if we connected those new windmills to oil drilling rigs. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite1" alt=":)" title="Smile :)" loading="lazy" data-shortname=":)" /></p><p></p><p>FWIW the commodity market regulators have recently increased the margin requirements for oil futures investments to discourage casual speculation, but there is a lot of smart and very serious investment speculation going on, for obvious reasons. Its a winning investment (so far). If the oil market fundamentals don't support actual higher prices in the future, all those investments turn into losing trades. Speculation alone cannot keep prices high contrary to fundamentals, while OPEC manipulating supply would be nice to break... </p><p></p><p>If we want to break the back of oil prices, we need to drill enough to create a small marginal surplus in world supply, so OPEC can't manipulate their supply to keep prices high. I think at above $100 it is even higher than the OPEC cartel is happy with because it will cause demand destruction, people will buy more efficient cars and drive less (so yes the price is even too high for the pushers). Prolonged high prices will also encourage investment in alternatives (like shale oil and tar sands). </p><p></p><p>Drill baby drill... </p><p></p><p>JR</p><p></p><p>PS: ---deleted---</p><p></p><p>PPS: An interesting observation about gold... A few years ago all the late night TV ads were trying to buy old gold jewelry from consumers. Now the late night TV ads are selling it back to them. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite1" alt=":)" title="Smile :)" loading="lazy" data-shortname=":)" /></p></blockquote><p></p>
[QUOTE="John Roberts, post: 23962, member: 126"] Re: hyper inflation in the USA? Feel free to send me all your worthless dollars. :-) Tension in the middle east is actually putting a bid under the dollar supporting it out of fear. There is a double whammy for oil prices, with supply uncertainty as we watch Gaddafi spank the rebels. One way or the other libya will eventually sell their oil to somebody, but the Saudis moving troops into Bahrain is not a sign of calm there. The future of the dollar depends on several things. For the record 9% unemployment means 91% employment... not all that bad as a whole, unless you're in that 9%. That said it has an impact on the mentality of the 91% with pay checks so they are more frugal. Not completely a bad thing. QE2 is due to stop soon, and economists are predicting US interest rate increases later this year, both of which should buoy the dollar. Congress still can't shoot straight and pass a budget, for this year, let alone next year, and that is their actual job... arghhh. The good news is the arguments are now about how much to cut the deficit, and reducing spending instead of increasing borrowing. So IMO what is going on in congress wrt spending right now will have significant impact on future dollar strength or weakness. AG will take a hit, if congress figures out we can't afford to keep subsidizing ethanol, but the farm state lobby is strong. I'm with you about increasing drilling here... It is inexplicable to me that we don't. The SPR is for emergencies. Short term high prices are not an emergency, and are based on what the market thinks future prices will be. There is plenty of supply but smart people are betting it will go up in the future. I think they are probably correct considering our lame ass energy policy. Maybe if we connected those new windmills to oil drilling rigs. :-) FWIW the commodity market regulators have recently increased the margin requirements for oil futures investments to discourage casual speculation, but there is a lot of smart and very serious investment speculation going on, for obvious reasons. Its a winning investment (so far). If the oil market fundamentals don't support actual higher prices in the future, all those investments turn into losing trades. Speculation alone cannot keep prices high contrary to fundamentals, while OPEC manipulating supply would be nice to break... If we want to break the back of oil prices, we need to drill enough to create a small marginal surplus in world supply, so OPEC can't manipulate their supply to keep prices high. I think at above $100 it is even higher than the OPEC cartel is happy with because it will cause demand destruction, people will buy more efficient cars and drive less (so yes the price is even too high for the pushers). Prolonged high prices will also encourage investment in alternatives (like shale oil and tar sands). Drill baby drill... JR PS: ---deleted--- PPS: An interesting observation about gold... A few years ago all the late night TV ads were trying to buy old gold jewelry from consumers. Now the late night TV ads are selling it back to them. :-) [/QUOTE]
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