Tuesday 14 June 2011
Posted by
Admin Hijrah Dinar
By:EK
OPEC discussion on Wednesday led to another technical hick up. It centered on whether or not the current slip-up in global growth is a result of too high oil prices. The Saudi’s on one side kept saying that high prices are having an impact, and should be lowered to support the global economy, but Iran insisted the world is slowing down anyway and increasing output may lower prices below $80, damaging its ability to fund domestic projects.
The crucial point is that the latest statistics from BP shows oil consumption rose by its fastest rate since 2004 last year and prices will be soaring further. The rising consumption this year will drive demand above its supply and will boost gold to continue its bull market as long as these fears persist. “At this point gold is an opportunity of a lifetime, it will go up and not look back” say President Ron Fricke of Regal Assets.
It’s interesting to note, that while those who blocked the increase in production included Venezuela, Iran, Algeria and Libya—but it was Iran’s strong unwillingness to seek a consensus at OPEC, which they said was about domestic concerns, but no less, be its political leadership just being opportunistic, taking a shot at Saudi Arabia and its friend, the U.S. And, even though there was no agreement, the Saudi’s said, they will pump as much as it believes the world market needs, besides, Iran and Venezuela standing in the way will not actually matter much at all for European, much less global supply.
For a very short term the governments of Europe have pointed to their own stored volumes to explain why they were not too concerned about the outcome of the OPEC’s meeting, and certainly the US has the ability to release some of the Strategic Petroleum Reserve which is currently as full as it has ever been, but at what point it might become an issue is yet too early to tell. With growing concern of demand such as the Chinese oil demand rising rapidly (the highest of any other nation) by more than 10% or 860,000 barrels a day, and with the ever rising oil prices which might drive the world back into a similar recession, to that which followed the last visit to $147 barrel oil, that option is likely to be increasingly considered which will re-raise the value of gold .
Fiscal concerns highlighted by massive debt and ongoing budget deficits in the developed world, and the emerging market economic development continuing at a rate of knots, means we’ll have more intensive growth in inflationary pressures throughout the global economic system—a growing consumer base eager for gold as status symbol and savings vehicle.
We have to recognize that the price of oil jumped after the OPEC oil cartel failed to agree on increasing production. When all the accounting is done, the entire globe consuming more energy in 2010 than ever before means, market participants see gold as protection against fiat money, central bank demands, inflation, hyperinflation, dollar debasement, debt monetization, etc. Such fear trade is the primary piece of the gold puzzle.
Source: http://goldcoinblogger.com/oil-surging/#more-3141
OPEC discussion on Wednesday led to another technical hick up. It centered on whether or not the current slip-up in global growth is a result of too high oil prices. The Saudi’s on one side kept saying that high prices are having an impact, and should be lowered to support the global economy, but Iran insisted the world is slowing down anyway and increasing output may lower prices below $80, damaging its ability to fund domestic projects.
The crucial point is that the latest statistics from BP shows oil consumption rose by its fastest rate since 2004 last year and prices will be soaring further. The rising consumption this year will drive demand above its supply and will boost gold to continue its bull market as long as these fears persist. “At this point gold is an opportunity of a lifetime, it will go up and not look back” say President Ron Fricke of Regal Assets.
It’s interesting to note, that while those who blocked the increase in production included Venezuela, Iran, Algeria and Libya—but it was Iran’s strong unwillingness to seek a consensus at OPEC, which they said was about domestic concerns, but no less, be its political leadership just being opportunistic, taking a shot at Saudi Arabia and its friend, the U.S. And, even though there was no agreement, the Saudi’s said, they will pump as much as it believes the world market needs, besides, Iran and Venezuela standing in the way will not actually matter much at all for European, much less global supply.
For a very short term the governments of Europe have pointed to their own stored volumes to explain why they were not too concerned about the outcome of the OPEC’s meeting, and certainly the US has the ability to release some of the Strategic Petroleum Reserve which is currently as full as it has ever been, but at what point it might become an issue is yet too early to tell. With growing concern of demand such as the Chinese oil demand rising rapidly (the highest of any other nation) by more than 10% or 860,000 barrels a day, and with the ever rising oil prices which might drive the world back into a similar recession, to that which followed the last visit to $147 barrel oil, that option is likely to be increasingly considered which will re-raise the value of gold .
Fiscal concerns highlighted by massive debt and ongoing budget deficits in the developed world, and the emerging market economic development continuing at a rate of knots, means we’ll have more intensive growth in inflationary pressures throughout the global economic system—a growing consumer base eager for gold as status symbol and savings vehicle.
We have to recognize that the price of oil jumped after the OPEC oil cartel failed to agree on increasing production. When all the accounting is done, the entire globe consuming more energy in 2010 than ever before means, market participants see gold as protection against fiat money, central bank demands, inflation, hyperinflation, dollar debasement, debt monetization, etc. Such fear trade is the primary piece of the gold puzzle.
Source: http://goldcoinblogger.com/oil-surging/#more-3141
Category:
Gold Saving / Investment
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