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Sudanese town burned, looted
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JUBA, Sudan — Armed men burned and looted the flashpoint town of Abyei on Monday after days of violence involving northern and southern troops in the disputed region. Southern Sudan’s military said it would defend its territory, while an Arab herdsman said his tribe is in Abyei to stay, an indication Sudan’s peace could crumble before the south’s July independence.
Violence flared late last week in Abyei, a no man’s land between north and south Sudan. Southern Sudan voted in January to secede from the south, and the region becomes an independent country on July 9. But violence in Abyei is overshadowing the march toward independence.
The UN mission in Sudan said armed men were burning and looting in Abyei and Read more…
Why oil prices will spike again soon
How long till the next oil shock?
Energy prices have been coming down this spring as fears of a Middle East blowup fade. But persistent global demand, tepid supply growth and easy money mean it may not be long till the next damaging spike, Goldman Sachs economists say.
Higher and higher
Oil prices could surge again by the end of 2012, economists Jan Hatzius and Andrew Tilton wrote in a note to clients this past weekend. They say the snail-like pace of global oil supply expansion – which Goldman projects at 1% or so annually – can’t keep a petroleum-addicted world economy rolling without prices rising, perhaps sharply.
So don’t get too used to paying a mere $3 and change for gasoline. Higher prices are on the way soon enough, thanks to stretched supplies and a Federal Reserve spigot that is likely to remain wide open for years to come.
“The fundamental story of increased oil scarcity is unchanged, and our commodity strategists now see distinct upside risks to their current forecast of $120/barrel for Brent crude by late 2012,” Hatzius and Tilton write. “So the impact of scarcer oil and higher oil prices on economic activity remains at the top of our list of worries.”
What makes higher oil prices almost inevitable is the depth of the jobs deficit in the United States. Unemployment is officially 9% but is more like 13% if you consider the low rate of labor force participation, says Bernstein Research strategist Vadim Zlotnikov. That number has fallen this year to levels not seen since 1985.
High joblessness and weak inflation will keep the fed funds rate near zero at least through next year and perhaps longer, Hatzius and Tilton write. That should help keep pushing unemployment slowly toward its long-run average of around 6% — but at the expense of further dollar depreciation, stronger global demand and, ultimately, higher oil prices.
So the selloff that has taken the crude price down to $100 or so in New York and $112 in Europe, where Brent is traded, may persist through much of 2011. But it won’t last Read more…
Beijing Agrees to Operate a Key Port, Pakistan Says
BEIJING—Pakistan’s defense minister said China has agreed to take over operation of the strategically positioned but underused port of Gwadar, and that Islamabad would like the Chinese to build a base there for the Pakistani navy.
Ahmad Mukhtar gave no clear timetable on the possible change at Gwadar, on Pakistan’s western coast, which is currently managed by a Singaporean government company. But his statement Saturday is the latest illustration of how Pakistan is portraying China as a powerful alternative ally and aid source if the U.S. scales down military assistance for Islamabad in the aftermath of Osama bin Laden’s killing.
China is eager to expand its influence in Pakistan over the long term, but is wary of the country’s chronic instability, which was highlighted late Sunday when a Pakistani naval base was attacked in the western port of Karachi, about 300 miles southeast of Gwadar.
Mr. Mukhtar made the announcement after accompanying Prime Minister Yusuf Raza Gilani on a visit to China last week. During that visit, Pakistani officials say, Beijing agreed to expedite delivery of a second batch of 50 jointly developed JF-17 fighter jets to Pakistan, possibly within six months.
The fighter agreement prompted India’s defense minister, A.K. Antony, to express serious concern in a meeting with reporters late Friday about the growing defense ties between China and Pakistan, and to assert that India’s only possible response was to build up its own military arsenal.
Attempts on Sunday to contact Mr. Antony and other Indian officials for comment about Gwadar were unsuccessful. In the past, Indian officials have expressed concern Read more…
USDA: Food prices to rise further during rest of 2011
World instability+Food Prices+Oil+Floods+Droughts+Inflation=A Hungry and Broke You/Me
A federal study finds food prices will take a bigger bite out of Iowans’ food budgets this year. Rick Volpe, an economist with the U-S Department of Agriculture, says a trip to the grocery store will mean either less food in your cart or less money in your wallet.
“It will be hard to pay roughly the same amount you paid in 2010,” Volpe says. “There is no question that the food budget is going up for a lot of households.” Volpe says the highest price hikes will be seen in the supermarket’s meat and dairy cases.
“We’re forecasting a seven-to-eight-percent increase in retail beef prices and six-and-a-half to seven-and-a-half for pork,” he says. “Your milk, yogurt and cheese, we are forecasting about a five-percent increase.”
Volpe says there are several reasons for the hike in food prices but the rising cost of fuel is foremost. Triple-A-Iowa says the Read more…
Forbes Predicts U.S. Gold Standard Within 5 Years
A return to the gold standard by the United States within the next five years now seems likely, because that move would help the nation solve a variety of economic, fiscal, and monetary ills, Steve Forbes predicted during an exclusive interview this week with HUMAN EVENTS.
“What seems astonishing today could become conventional wisdom in a short period of time,” Forbes said.
Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending, the media mogul and former presidential candidate said. The United States used gold as the basis for valuing the U.S. dollar successfully for roughly 180 years before President Richard Nixon embarked upon an experiment to end the practice in the 1970s that has contributed to a number of woes that the country is suffering from now, Forbes added.
If the gold standard had been in place in recent years, the value of the U.S. dollar would not have weakened as it has and excessive federal spending would have been curbed, Forbes told HUMAN EVENTS. The constantly changing value of the U.S. dollar leads to marketplace uncertainty and consequently spurs speculation in commodity investing as a hedge against inflation. Read more…
Scores dead in south Sudan cattle raid
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| The south Sudan government has accused Khartoum of aiding the rebels to destabilise the region [EPA] |
At least 82 people, including women and children, have been killed after a south Sudan rebel group attacked cattle herders, a southern army spokesperson has said.
Fighters under the leadership of Philip Bepan attacked southern troops of the Sudan People’s Liberation Army (SPLA) in neighbouring Unity state on Saturday, Philip Aguer, SPLA spokesperson, told AFP news agency on Tuesday.
“They were chased away and went to Warrap state, where they attacked cattle camps on May 8, at a place called Balhom Weth. They killed 34 and wounded 45 civilians, including women and children,” he said.
“On the same day they were returning with the looted cattle, they were ambushed by the cattle herders. Forty-eight of the fighters Read more…
Where is the Global Economy Headed? The Experts Weigh In
I’m writing today after spending the last three days in Boca Raton, Florida, attending The Next Few Years: A Casey Research Summit. If you’re not already familiar, the purpose of this summit was to bring together many of the world’s top economic and investing minds to share with us where they believe we’re headed in the months and years ahead.
The cast of speakers was impressive, to say the least. They brought a variety of view points, an almost overwhelming amount of data and analysis, and a perspective on what the current world means for investors that would be hard to build on. Yet, with all this variety of thought and perspective, one central theme seemed to emerge.
If you’re able to see the annihilation of your currency coming down the pike, and you take the right steps to protect your wealth, you can come out on the other side largely unscathed. Given the right investment strategy, you may even be able to grow your wealth significantly during this time.
While I knew this on some level coming into this event – I’ve been reading Casey Research’s work for just a few months now, and this was the first of their events I’ve attended – I was given pause by Casey CEO Olivier Garret’s welcoming remarks.
“While no one can predict the future with complete certainty,” he said, “it should give you comfort to know that the faculty for this summit have in common that they correctly anticipated the trends now dominating the global landscape.”
When you bring together 35 experts who each correctly predicted what’s happened in recent years – while the mainstream media Read more…
QE2 Is Damaging The Economy And Reducing GDP Growth
QE2 is going to go down as one of the worst monetary policy initiatives in the history of the modern Federal Reserve era. On almost any metric applied, QE2 ends up not only falling well short of its proposed goals, but actually turns certain metrics like GDP growth negative compared with the prior quarter, and heading in the wrong direction.
Costs Eat into Corporate Profits = No Hiring
Analysts all over Wall Street are starting to revise their 2nd quarter GDP forecasts down, and some like Goldman Sachs have made several downward revisions as higher input costs due to a weak dollar are creating an additional burden on businesses and consumers and thus slowing economic growth.
A weak dollar (Fig. 1) to a point can help exports, but an extremely weak dollar which in combination with QE2 liquidity juicing up commodities even further, turns out to be a net negative on the economy, and risks sending the Read more…
Gold and silver: through the roof
All that glitters is gold, and silver… at least that’s what the market thinks. The price of spot silver jumped 5 per cent to hit $49 a troy ounce, and gold hit a record high for the seventh consecutive session, at $1,517.71 a troy ounce in early trading on Monday. Meanwhile, the US dollar fell to a three-year low.
According to reports from Reuters, much of the interest looks to be coming from India and China.
“Everyone is buying… there is stop-loss buying, as well as a good buying interest from China,” Reuters reported, citing a trader in Hong Kong.
Gold has been at all time highs since the start of the year when oil prices jumped and geo-political concerns in the Middle East began to shake confidence in a global economic recovery. According to the FT’s Jack Farchy, investor holdings in gold through exchange traded funds have risen 1.38 per cent in April this year – the strongest monthly gain since August 2010.
But it’s not just gold that has generated interest in recent months. Holdings in iShares Silver trust, the Read more…
Oil Crisis Just Got Real: Sinopec (Read China) Cuts Off Oil Exports
As if a dollar in freefall was not enough, surging oil is about to hit the turbo boost, decimating what is left of the US (and global) consumer. Xinhua, via Energy Daily, brings this stunner: ” Chinese oil giant Sinopec has stopped exporting oil products to maintain domestic supplies amid disruption concerns caused by Middle East unrest and Japan’s earthquake, a report said Wednesday. The state-run Xinhua news agency did not say how long the suspension would last but it reported that the firm had said it also would take steps to step up output “to maintain domestic market supplies of refined oil products”. Oh but don’t worry, those good Saudi folks are seeing a massive drop in demand… for their Kool aid perhaps. “Sinopec would ensure supplies met the “basic needs” of the southern Chinese special regions of Hong Kong and Macao, but they also should expect an unspecified drop in supply, Xinhua quoted an unnamed company official as saying.” Now… does anyone remember the 1970s? Read more…
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