Oil Drops over 30% since summer, now what?

[NoTrespassing]

U.S. Sugar Policy

The United States (U.S.) is the fifth largest sugar producer and fifth largest consumer of sugar in the world. The U.S. sugar industry has enjoyed trade protection since 1789 when Congress enacted the first tariff against foreign-produced sugar. Since then, the U.S. government has continued to provide trade support and protection for its domestic sugar industry.

A good example of tariffs. They are quite complicated. I wonder how much cheaper our food would be without the sugar support from our good ol US government. Did you know that ethanol producers can buy excess sugar from the government at a loss to the government for the same price as corn? Did I read that right?

Kevin

 

[MinnesotaEric]

Commodities Retreat to Five-Year Low as Oil Tumbles With Bullion

Commodities Retreat to Five-Year Low as Oil Tumbles With Bullion - Yahoo Finance

I like your explanation and now that oil is at a 5 year low, do you have a prediction of where the bottom is and how long it will stay there? Then, can you tell me how you would make money on this drop if you have some cash laying around making almost no interest?

Kevin

Kevin,

I'm reading a book right now that looks at peaks and valleys from a demographic perspective. While the timing may be off, the general trajectories are very, very interesting. If you're interested, the title is the The Demographic Cliff: The Great Deflation of 2014-2019 by Harry Dent, Jr.

 

[KiotiKowboy]

Eric ... interesting reading your thoughts.

So, what say you about the coming loss of reserve currency status for the US dollar?

 

[NoTrespassing]

Eric ... interesting reading your thoughts.

So, what say you about the coming loss of reserve currency status for the US dollar?

When do you predict that will happen? Have you seen the strength of the dollar lately? I don't see it in the near future.

Kevin

 

[murphy1244]

Nixon took us off the gold standard and tied it in with Oil. The Arabs would only take Dollars for oil.

 

[MinnesotaEric]

Eric ... interesting reading your thoughts.

So, what say you about the coming loss of reserve currency status for the US dollar?

We're not losing our reserve currency. The dollar is ripping right now because people are buying it. By people, I mean institutional investors and other central banks. The yen is at a seven year low agains the dollar. This holds, and it'll be time to buy Japanese goods. Downside, any exports priced in dollars will see demand destruction due to pricing. This is a problem in grains because we so over-produce grains above our own domestic needs. Bad for AG sales, so look for used equipment to devalue next year as OEMs start discounting new equipment. Deere is already laying off 1,000 workers and AGCO, 100 workers anticipating decelerating sales.

NoTresspassing, the FOREX guys think the dollar will continue to ascend due to continued foreign buying interest. I don't trade FOREX, but the bulls are selling put protection, while the wary are setting up strattles, which means they think the dollar will trade in a set range. Eventually, the dollar will devalue relative to other currencies.

 

[MinnesotaEric]

Nixon took us off the gold standard and tied it in with Oil. The Arabs would only take Dollars for oil.

FWIW, gold standards don't help growth. Look at the lesson the British learned. That said, gold operates on a fractional reserve system as well. Back in 2007 Singapore was ticked off that gold bullion transferred from the US Treasury turned out to be gold-plated tungsten. Once I heard that, I never wanted to own gold again because of my inability to judge the purity.

 

[dmccarty]

The WSJ, which I read daily for over 20 years, is 2 things:

1) One of the most conservative media outlets in the world.
2) One of the most reliable.

On financial news, I'd trust their reporting over pretty much anybody else.

Of course, IHMO

The WSJ's editorial page is conservative. The rest of he paper leans left according to the studies I have read and said studies have been reported on by the WSJ. :laughing:

The difference between the WSJ and other papers is that they do a good job of actually reporting news and digging into issues beyond the headlines. The housing and banking market meltdown was not a surprise to anyone reading the WSJ. The WSJ talked about what was happening before the events took place and a reader of the paper could watch the train wreck unfold. What is interesting is the talking heads yacking and missing the real cause of the various meltdowns and years later the Federal government sues/black mails banks for doing what the Fed ask them to do in the first place or for something the government did.

Later,
Dan

 

[tcartwri]

When do you predict that will happen? Have you seen the strength of the dollar lately? I don't see it in the near future.

Kevin

It has already happened.

 

[NoTrespassing]

It has already happened.

Links please