 Gold
Forecaster - Global Watch
The US$, Oil, Hurricanes...
Julian D.W.
Phillips
May 27, 2006
Excerpts
from "Gold Forecaster - Global Watch."
The U.S. $ and
its prospects
The O.E.C.D. has
issued warnings that are positive for gold and silver and platinum.
The O.E.C.D. has stressed that governments are unable to deal
with deteriorating global current account balances, which could,
if allowed to continue, lead to "an adjustment which could
turn unpleasant" and even "brutal".
The E.C.B. was advised by the
O.E.C.D. against raising interest rates but the Fed was encouraged
to continue its interest rate raising. China was urged to raise
rates and allow its currency to appreciate.
The O.E.C.D. expects oil prices
to stay high. They feel that the major downside of globalization
was increasing oil and commodity prices.
We mention this as support
for our own stance on the decaying global economy, a theme we
have followed for some considerable time. We continue to do this
as we see World leaders continue to posture their own nations
interests in a global economy desperate for them to act in concert
in the interests of the globe. We don't see this happening as
the very nature of national politics and leadership can only
consider global interests, once national interests have been
satisfied. As a prime example of this we include this item
on John Snow, U.S. Treasury Secretary, where his very words could
not have made this point clearer:
 "U.S.
Treasury Secretary John Snow insisted on Friday there has been
no weakening in the United States' commitment to a strong dollar
and vowed to hold China's "feet to the fire" over promises
to make its currency more flexible. On CNBC Television, Snow
was asked whether the Bush administration has become less forceful
in advocating a strong dollar and so effectively has endorsed
a decline in its value. "I don't think so. It's the policy.
It's in our interests," Snow said. "But we also say
as well that currency values should be set in open, competitive
currency markets, to be in line with underlying supply and demand
and market forces," he added. He also said that neither
the United States nor other key trade partners should follow
"beggar-thy-neighbor" currency policies that seek to
gain an advantage by pricing exports unfairly cheaply."
- Q.E.D.
The Oil
Crisis
 The Russian
Trading System, Russia's premier stock market, announced that
it would start trading in gold, oil, and oil products on June
8. The announcement comes in the wake of President Vladimir Putin's
state of the nation address May 10, when he said Russia, as a
leading oil-exporting nation, should establish its own oil exchange
to trade crude and petroleum products for Rubles.
The stock exchange also said
it would start trading in futures and options on oil and oil
derivatives, including Urals-brand diesel fuel, jet fuel, and
fuel oil. Trade will be in Rubles based on prices calculated
by the Platts agency. The settlement period for a contract is
one month and the minimum security guarantee on a contract is
10% of its overall value. The derivatives section of the RTS,
known by its Russian acronym 'Forts', will trade futures and
options on gold in Rubles based on the London Stock Exchange
evening fixing rate. The settlement period for a contract is
one month and the minimum security guarantee on any contract
is 5% of its overall value. The statement said RTS would collect
a 1-ruble commission for each concluded contract.
The chipping away at the use
of the $ for all oil contracts worldwide is about to begin in
earnest! The first place we expect the numbers will be reflected
will be the figures of Treasury purchases each month. Last month
saw the U.K. and Caribbean Banks buy a disproportionately large
amount of U.S. Treasury assets. It appears that this is part
of a international $ liquidity management programme. If this
is correct the two centers will buy even more from now on, as
other foreigners reduce their purchases of the U.S.$. The process
may take some months to be fully visible, but we are watching
to see just how the waning role as global reserve currency affects
the U.S.$ exchange rate.
Hurricanes on the
way and threatening!
 The U.S.
National Oceanic and Atmospheric Administration said 2006 could
see up to 10 hurricanes, a dark cloud over the Gulf of Mexico,
which last year saw offshore platforms toppled, undersea pipelines
ruptured and several coastal refineries flooded.
About 20% of the Gulf's 1.5
million barrels per day of crude oil output has been shut since
the record 2005 storm season along with 13% of the region's 10
bcfd of natural gas production.
Whilst the oil price is declining
at the moment, the first serious hurricane hit on the oil region
of the Gulf will see prices rocket and the fight over global
supplies rise to new levels. The impact of the hurricane in the
oil market will hit growth in all nations of the world one way
or another. The eventual rationing of oil in nations unable to
secure sufficient supplies is now becoming a more distinct feature
of this future. Gold will reflect the increase in these global
tensions as it has been doing this year so far.
Angolan Oil - Street
Smart Producers?
- Total SA of France and Brazil's
Petrobras won contracts to lead international consortiums to
explore two offshore oil fields in Angola. Total is to head exploration
in a deepwater field called Bloc 17. As lead operator, it is
to have a 30% stake in the field, with SSI taking 27.5% and Sonangol
holding 20%. In Bloc 18, Petrobras was granted a 30% share, with
SSI taking 40% and Sonangol 20%. Smaller local companies took
the remaining stakes. Total is to pay Angola US$670 million (¤525
million) and Petrobras US$310 million (¤243 million) in
"signature bonuses" - a one-time cash payment made
upon signing a contract.
- The largest stakes in the
two blocs are to be held by SSI, a joint venture between Angolan
state oil company Sonangol and China Petroleum & Chemical
Corp., or Sinopec. Sinopec did not yet have the technical knowledge
to lead exploration in deepwater fields. Sinopec is Asia's largest
refiner by capacity.
- Earlier this month, Italian
energy company Eni SpA paid $902m to secure a controlling stake
in Bloc 15. Total and Petrobras are part of that bloc's consortium.
Petrol Producers from Russia
to Venezuela and down through Africa are ensuring that both the
East and the West will get their oil. This not only gives the
Producers power over whom they supply, but allows them to play
one off against the other, gaining huge leverage in the process.
No longer will the West be able to exert pressure on them, because
of this, but will have to tolerate the antics of small oil supplying
governments as we are seeing in Latin America now.
May 26, 2006
-Julian
D.W. Phillips
email: gold-authenticmoney@iafrica.com
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