Time for Uncle Sam to think and act fast... - by rajiv
Friends,
I am surprised to see how USA is still ready to believe that Crude is not going on speculation…When the crude demand has risen by just 1% in last year or so, how can Crude rise 40% in last 3 months….
It is now clear that Oil Speculation is on rampage without demand out stripping supply.
Lots of money has gone in for speculations and more money is still coming in as targets are given high…
The biggies Like Goldman sachs etc have big position in Crude basket and now they would like to cut their long position….and hence they are giving high target so that they can sell and they can come out of their longs with BIG profits…
When a US Senate spokeman says that there is no speculation in crude I was surprised to read that.
If crude is going to go up and up to $200 level and also surpass it then what will happen to US Airlines?All the Airlines will have to be closed as with such a high rate of Air Fares who will travel in those Airlines?What will happen to the World biggest economy?That is US?
The price of Milk is more now then the price of 1 gallon Gas….That is the anamoly in USA .The government is not even increasing the minumum rate per hr when compared with inflations, Gas price rise, Milk price rise etc….The person who is living on pay is finding difficult to live in such a scenario……
Crude has to come down otherwise it will take world back to 1929 recession.The situation then, no one knows what happened then…and hence will have catastrophe effect world over.The way Chinese market and Indian market are reacting is just a mayhem, mayhem everyday…..China is down 52% and India is down by 40% and still Citi gr and Lehman br says that India is still overvalued……They have first to look for their burning house and try to save investors money put in their MF’s.Both had lost their credibility.Lehman br is on brink of collapse and trying to garner funds from Gulf countries to survive.No wonder both are selling heavily in Indian Markets….
My first question goes to them who feels that Crude runup is not a speculation….
Has the demand went up by 40% in last 3-4 months?If the answer is no then Oil shouldn’t have gone up by 40% and if that is the case then Oil recent runup is speculation.It is just a case of more money chasing crude and other commodities.
If India and China are slowing down, how will one be able to justify the crude and commodoities runup?If the demand are slowing then how can Demand oiutstirp supply ?
Sooner or later the Crude is going to tank and tank in a big way.It can go even below $100 to around $80 level…..
The financial houses like Goldman, Merill Lynch, etc are ready with a call of crude touching $200 and even more.I am reading all these, but can anyone tell me what will happen at Crude $200 and over?World will be in such a BIG recession that it will take decades to come out of it.According to my view, Crude and commodities are going up only because of excess liquidity and all the longs are to be cut at any given time…..
I am waiting for that D day…..all the world funds has started pouring money in Crude and commodities because return on equites has become negative…..
I think it can be only USA who can do something in this speculation…….as the commodities market in USA needs very less margin to trade in crude and commodities.And it US has to that otherwise their own economy will get derailed in such a bad way that Fed or Ben will find difficult to save it from catastrophic effect.Their Autos co are already in death bed as we see GM and ford are at multiyear low price.
If Gas is going to be available at $4.5 and then at $6 and $8 then who is going to buy these big cars which is comsuming big gas and givin a milage of just 20 mile per gallon?
If Fuel prices will go on up and up what will be the price of Air Travel tickets?It is already burning the pockets of companies where their employees has to travel frequently.What will be their profit?Aree…..they will be in a huge huge loss and they will be closed.
I think that with subprime crisis still lingering high on the economy of USA, forecloser are still coming up in big way,no way to come out from there, I think US can’t afford to have Gas at $ 4.5/gallon…..these will blow as a death knelt to US economy….
I think it is high time that Mr Prez take a sane decision to stop crude speculation as early a possible…….