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Will $200 oil kill the economy?
Unrest in key oil-producing nations opens the door to price spikes that could push gas to $7 a gallon and spin the world back into recession. Here’s how we’d get there, and how to protect your portfolio.
Are your pocketbook and portfolio ready for $200-a-barrel oil?
This kind of dramatic price spike may seem less likely now than a few days ago, with oil markets calming down a bit and the price slipping below $100. But given the instability and unrest rolling through the Middle East and North Africa, it’s a definitely a viable scenario.
For the moment, most oil sector analysts have gone off high alert because of a Saudi Arabian pledge to increase production to make up for any shortfalls sparked by unrest. But that ignores a key angle in all this: There’s simply not enough spare capacity to make up for the production losses we’d see if the rolling crises in the region hit just two or three major producers at once.
This could easily happen, given the heightened Read more…
Bernanke warns on oil price ‘threat’
AFP – US Federal Reserve Chairman Ben Bernanke speaks during a hearing of the Senate Banking, Housing and Urban … WASHINGTON (AFP) – Federal Reserve chairman Ben Bernanke on Tuesday warned a “sustained” rise in oil prices could threaten US growth and spark dangerous price rises, as he eyed turmoil in Libya.
Bernanke told Congress he believed unrest in the oil-rich Middle East would result in “temporary” and “modest” increase in US prices, but acknowledged greater risks remain.
“The most likely outcome is that the recent rise in commodity prices will lead to Read more…
Dollar Declines to Lowest Since November on Wagers Fed Will Lag Behind ECB
The dollar fell to its lowest level since November against the currencies of six U.S. trade partners on bets the European Central Bank will be more aggressive than the Federal Reserve about controlling inflation.
The euro rose against the dollar on speculation ECB President Jean-Claude Trichet may indicate this week a readiness to increase borrowing costs while Fed Chairman Ben S. Bernanke may signal economic stimulus will continue. Sweden’s krona climbed to a 30-month high after Riksbank Governor Stefan Ingves said interest rates may be raised at every meeting this year.
“The big driver for the euro has been short-term interest- rate differentials, which had moved against the dollar,” said Paresh Upadhyaya, head of Americas G-10 currency strategy at Bank of America Corp. in New York. “Since the beginning of the year it’s been pretty much a one-way trend.”
IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against six currencies, decreased as much as 0.7 percent to 76.756, the lowest level since Nov. 9, before trading at 76.893 at 5 p.m. in New York, down 0.5 percent. The gauge, which is weighted 57.6 percent on euro movements, fell 1.1 percent in February. Read more…
China tamps down Middle East-inspired protests before they can gain momentum
The Chinese government met protesters with a show of force Sunday. In Shanghai, police converged whenever a group of more than a dozen people seemed to be forming. (Peter Parks)
BEIJING – Police and security officials displayed a show of force here and in other Chinese cities Sunday, trying to snuff out any hint of protests modeled on the uprisings in the Middle East and North Africa. In Shanghai, several hundred people trying to gather were dispersed with a water truck.
Premier Wen Jiabao, meanwhile, used a morning Internet chat to promise to purge senior officials who are corrupt and to rein in inflation and rising home prices, directly addressing some of the most common grievances of ordinary Chinese.
Since a January uprising in Tunisia spurred similar anti-government protests across the Arab world, threatening long-entrenched authoritarian regimes, China’s Communist rulers have reacted nervously, with both defensive and aggressive tactics.
Officials have used state-run media outlets to dismiss any comparisons of those regimes with China. At the same time, they have stepped up public comments on the need to address “social conflict” and to tackle problems such as the growing income disparity between the rich and poor. They also have Read more…
Wikileaks, Bahrain and Saudi: Concerns over Rising Food Prices Spread
Bahrain, which saw deadly protest this month, is eager to control the price of food according to Wikileaks
Rising food prices have been at the centre of the recent riots to hit the Arab world and so it comes as no surprise that many Arab nations are working hard to avoid similar food price rises.
According to the Wikileak revelations, Bahrain increased government subsidies in an effort to off-set rising prices for lower-income families in 2008 and has promised more generous subsidies recently. Even so, this hasn’t stopped political turmoil as the tiny Gulf state has been rocked by explosive protests this month that left seven dead and hundreds injured when troops opened fire on protesters.
Bahrain, which has a population of just over 1 million, has struggled with rising Read more…
China’s droughts nears worst in 200 years, adding pressure to world food prices
The recent unrest in the Middle East, which has been attributed, in part, to high food prices, gives us a warning of the type of global unrest that might result in future years if the climate continues to warm as expected. A hotter climate means more severe droughts will occur. We can expect an increasing number of unprecedented heat waves and droughts like the 2010 Russian drought in coming decades. This will significantly increase the odds of a world food emergency far worse than the 2007 – 2008 global food crisis. When we also consider the world’s expanding population and the possibility that peak oil will make fertilizers and agriculture much more expensive, we have the potential for a perfect storm of events aligning in the near future, with droughts made significantly worse by climate change contributing to events that will cause disruption of the global economy, intense political turmoil, and war. Read more…
Ethiopia will soon arise to protest
WINDS OF CHANGE CONTINUES BLOWING Major developments in 6 African countries and other Arab nations. And Ethiopians fate!
Today, the drama of utmost importance is underway in different parts of the world, specially, in the North African countries. After its beginning in Tunisia, the flammable and miserable peoples voices is fast circulating from country to country. The basic demands of peoples of these nations is clear; the quest for better living conditions, jobs, respect of human and democratic rights and so on.
What makes special the current movement in Africa and the Arab world is women’s and children’s gather out in the streets to oppose the rotten regime of their country. More of less the peaceful demonstration were carried out with fruitful results in Egypt and Tunisia. On the other way, in LIBYA and Lebanon the governments use machine guns to disperse protesters. A people went out bare handed shot by government mercenaries. Though, the protesters are still going on. as the Tunisian protests were still escalating,
What we are observing in North Africa and Middle East are the results of unfolded dramas left on the society for decades. The Bahrain and Libyan Governments uses their special forces to disperse the protesters. They come up against the protesters by hiring foreign mercenaries to fire against the peaceful demonstrators.
Let’s see the blowing winds of change in these Countries
TUNISIA: When the demonstrations started on 17 December, It wasn’t expected. Just before the December protests began, WikiLeaks released internal U.S. State Department communications in Read more…
Thousands in India protest increasing food prices
NEW DELHI — Tens of thousands of trade unionists, including those from a group linked to India’s ruling party, marched through the streets of the capital on Wednesday to protest food prices, piling pressure on a government already under fire over graft. The demonstration in New Delhi was the latest in a wave of protests sweeping across the world, including the Middle East and Africa, ignited by a worldwide spike in food prices.
India, Asia’s third-largest economy and home to more than a billion people, has been grappling with double-digit food inflation. Hundreds of millions of poor have been hit the hardest.
In one of the largest anti-government protests in New Delhi in recent years, at least 50,000 people representing trade unions from the country’s political parties marched through the center of the capital towards the parliament building. In a sea of red flags and hats bearing their union name, protesters chanted Read more…
Separate but unequal: Charts show growing rich-poor gap
The Great Recession and the slump that followed have triggered a jobs crisis that’s been making headlines since before President Obama was in office, and that will likely be with us for years. But the American economy is also plagued by a less-noted, but just as serious, problem: Simply put, over the last 30 years, the gap between rich and poor has widened into a chasm.
Gradual developments like this don’t typically lend themselves to news coverage. But Mother Jones magazine has crunched the data on inequality, and put together a group of stunning new charts. Taken together, they offer a dramatic visual illustration of who’s doing well and who’s doing badly in modern America.
Here are three samples:
This chart shows that the poorest 90 percent of Americans make an average of $31,244 a year, while the top 1 percent make over $1.1 million:
Saudi King Orders $37 Billion in Benefits to People To Quell Any Unrest
RIYADH (Reuters) – Saudi King Abdullah returned home on Wednesday after a three-month medical absence and unveiled benefits for Saudis worth some $37 billion in an apparent bid to insulate the world’s top oil exporter from an Arab protest wave.
The king, who had been convalescing in Morocco after back surgery in New York in November, stood as he descended from the plane in a special lift. He then took to a wheelchair.
Hundreds of men in white robes performed a traditional Bedouin sword dance on carpets laid out at Riyadh airport for the return of the monarch, thought to be 87.
Abdullah left his ailing octogenarian half-brother, Crown Prince Sultan, in charge during his absence.
Before Abdullah arrived, state media announced an action plan to help lower- and middle-income people among the 18 million Saudi nationals. It includes pay rises to offset inflation, unemployment benefits and affordable family housing.
Saudi Arabia has so far escaped popular protests against Read more…
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