CHINA CONFIDENTIAL
Sunday, November 16, 2008
Three Key Questions as the Crisis Spreads
Foreign Confidential....
Everyone agrees that the current world financial crisis began in the United States.
But there are three important questions that few analysts ask or seem to want to address:
1. How much did the meteoric rise in crude oil prices contribute to the crisis?
2. What role did speculation and market manipulation--by banks, hedge funds, pension funds and other large institutional investors--play in increasing oil prices?
3. Did oil-producing, uranium-enriching, Islamist Iran deliberately raise tensions in the Middle East--with threats and missile tests--in order to drive up the price of crude?
Despite Price Drop, Gold Still Seen as Safe Haven
Foreign Confidential....
A senior gold industry official said Sunday that despite its recent price volatility, the precious metal will remain a safe haven for investors in what is one of the worst financial crises in history.
Rozanna Wozniak, investment research manager of the World Gold Council, told Reuters that even though gold bullion has dropped nearly 20 percent since October after a recent wave of fund selling, gold still offers the diversity and value that investors will seek in a high-risk climate.
"Even at around $700 gold is higher than it was about two years ago," Wozniak said. "Gold has been keenly sought after, reflecting its perception as a safe haven and store of value. There is no risk of it being affected by defaults."
Wozniak added that the strong buying by investors in gold as a safe haven had been offset by speculative investors taking profits.
"A significant proportion of this selling has reflected gold's better performance relative to other assets," Wozniak said. "These investors bought gold as their insurance policy and, during times of significant market turmoil and large falls in asset prices, have been able to make a claim against that policy."Pickens Predicts Return to $100 Oil in 2009
Dateline USA....
Texas oil tycoon T. Boone Pickens predicted Sunday that the price of crude oil will be back up to $100 a barrel in a year's time.
Interviewed on NBC's Meet the Press TV program, Pickens also predicted oil will range between $200 and $300 by 2018.
Oil has dropped 60 percent from July's record $147.27 a barrel.
A combination of higher oil prices and economic recession--or full-blown depression--would be truly catastrophic.
POSTSCRIPT: Barclays Capital estimates oil will return to the $90-100 per barrel range by the first quarter of 2009, and hit $118 before the end of '09. The forecast for 2010 is $126, rising to $137 by 2015.
Barclays believes falling production in non-OPEC member countries, especially in Mexico and the North SEA (UK and Norway), will lead to higher prices. Hoped for new production in Canada and Brazil will take longer than expected to come on stream, the bank adds.
Sunday, 16 November 2008
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