Finance

• A Limp Oil World

  China was the savior of commodities the past year. And a particularly hot spot today. China's customs agency released some impressive trade numbers. December exports were up 17.7% year-on-year. Imports jumped even more. Up 55.9% year-on-year. Markets worldwide rallied on the news. Investors took the numbers as a sign the global economy is picking up. Some of the enthusiasm should be tempered by the fact these are year-on-year figures. Meaning we're comparing December 2009 to December 2008, the latter having come at the depth of the financial crisis and therefore being one of the worst months on record for a…

• So You Think You Can Debase a Currency

  Yesterday I visited the nicest public pool I've ever set trunks in. The place was airplane hangar-sized. Giant hot tub. Towering waterslides. A float-along river for the kids. All this to be found in a tiny Tokyo suburb, the kind of place even most Japanese have never heard of. The pool's users can thank the Japanese government. Tokyo knows how to spend. Following the Japanese crash in the early 1990s, the government spent in an attempt to keep the economy afloat. Between 1990 and 2008, central government debt surged from $2.2 trillion to $8.5 trillion as the feds pumped out…

• Liquidity Problems - Two Major Miners Run out of Cash

  It's been awhile since we heard the phrase "liquidity problems". In October 2008, you couldn't set browser on internet without hearing about liquidity problems somewhere. During the financial crisis, cash disappeared into the cracks of the financial system. Leaving a lot of people in the lurch. Interesting then that liquidity issues have once again emerged this week. In at least two high-profile locations globally. Today, Australia's Griffin Coal announced the company will go into receivership after defaulting on $22 million in interest payments due on $475 million worth of bonds issued to U.S. investors. Management cited a "temporary liquidity shortage"…

• Unstimulating America - How do you Undo a Trillion Dollars?

  That question has been on the minds of leaders and financial thinkers worldwide, since the financial crisis broke last fall. In response to falling asset prices, governments around the globe created trillions of dollars in stimulus spending and rescue funding. In the U.S. alone, the monetary base grew by a trillion dollars in a matter of months. At the time, it was believed that the crisis had to be stemmed at all costs. Politicians recognized that massive money creation could lead to inflationary problems down the road. But they took a "deal with that bridge when we come to it"…

• How to Guarantee Success - Why Mexico Hedged it’s 2010 Oil Production at $57 per barrel

  A lot has been made this week of news that Mexico hedged the bulk of its 2010 oil production at $57 per barrel. Several analysts chalked this up to a vote of non-confidence in the oil market. And wondered why Mexico would be so bearish when 2010 futures are trading between $70 and $80. This analysis misses a few key points. Which go to the heart of the philosophy behind hedging. By hedging at $57, Mexico's leaders are not betting that oil will drop in price. They are making a decision that protecting against downside below $57 is more important…

• The Hot Money Likes Commodities These Days

  Inflows of speculative investment money into gold, copper and oil continue unabated and the numbers are staggering. I wrote a few months back about investment inflows into commodities setting a new weekly record, at just over $1 billion. In November and so far into December that record has been left in the dust. As of December 2 (the last date for which we have data), global investment inflows into commodities had run over $1 billion weekly for three weeks straight. In the week from November 12 to 18, a new record was set: $1.341 billion. Nearly 30% higher than the…

• Interdependence, Integration and Investment:The Ineluctable Need to Find New Emerging Oil Players

  In October 2009, Nobuo Tanaka, Executive Director of the International Energy Agency (IEA), who was presenting at the International Energy Week and at the Oil Congress held in Moscow, predicted a medium-term stabilization of global oil demand in 2010-11 at a 2007-08 level until 2014, whether World GDP growth is high or low. He also mentioned a very impressive and robust surge in Russia’s oil production for 2009 - from 10mb/d in January 2009 to over 10.2mb/d in September 2009 - that took all observers by surprise. However, the World oil supply capacity growth prospects will be curbed due to…

• How Long Can The Gold Bull Keep On Charging?

  Most financial experts going on record these days seem to agree with the assertion that, at least for now, wise investors in the winter months of 2009 and heading into the spring of 2010, won’t need to travel all the way to the narrow streets Pamplona Spain in order to participate in the most exciting bull run of the season. No need to risk hair nor hide as these market commentators who are openly talking about the current “Gold Bull Run” seem to be in agreement that the bulls will continue to run, smiling and laughing all the way to…

• Are we at the Start of Another Commodity Boom? According to Jim Rogers we are

  There are very few guarantees in the world of investment, especially at a time when so many national economies are in a current state of flux and seizure, which in turn, “muddies up the water” when it comes to asserting confident prognoses regarding the foreseeable global economy in general. However, one fairly accepted “rule of thumb” to be found in this wonderful field of global economics states clearly that: “Following every substantial financial crash, comes an equally robust and vital commodity boom!” So are investment gurus beginning to rub their hands together in preparation of the size Commodity Boom that…

• How to Speculate in the Energy Markets: Crude Oil Traders have Options

  Crude oil is among the most notorious commodity markets but is also among the most treacherous.  Nonetheless, speculators are drawn toward the leverage and volatility provided in this trading arena...and the stories of riches made and lost by its participants. Before risking your hard-earned money speculating in crude oil, it is important to be aware of a few details.  For starters, it is possible to trade oil via ETF's that attempt to track the price of crude, through the shares of firms that are correlated to crude oil prices or by using the futures and options markets.  Despite the alternatives,…