10.19.2007

Calamity List

So many calamities, so little time!

Oil
After busting through the $90 price level yesterday, barrels of oil have eased a bit as of this writing. Still, almost ninety bucks a barrel seems ludicrously high. Remember the panic last year as oil was poised to break $60 a barrel? In 2005, this was uncharted territory.

So what's the deal with the oil prices? The main culprit appears to be the crushing devaluation of the US dollar. As oil is priced in US dollars, Americans are paying the price, while other countries with stronger currencies are gobbling up oil as fast as possible. Combine that with the rumors of Turkey making incursions into Iraq, and we may be looking at $100 barrels very soon.

We'll see if all those alternative energy experts are right when they say $100 oil makes other sources economically viable.

Credit Crunch

No worries here folks, there is no credit crunch, the worst is over!

Despite the constant spinning by optimistic analysts, the worst is far from over. To seek the truth, it's always best to follow the money. And when times get bad, money goes into treasuries. Today, treasury notes hit their highest levels in five years.

The dreaded spillover into other industries seems to have begun. Hershey, the candy colossus, has reported a significant drop in profits due to credit vulnerabilities of their distributors and other partners.
Another rate cut seems inevitable, although this could further devalue the dollar. It's a continuous feedback loop of calamity!

WWIII
Those crazy Turks and their jingoistic rhetoric! Wait...some new information coming in. Seems our very own President Bush has upped the ante and is threatening WWIII if Turkey continues with their nuclear plans.

Which brings me to the sad disconnect Americans have in differentiating the state of Iran with the people of Iran. No other Mid-East country's citizenry is more pro-America than the Iranians, and this point is always lost among the bloviations of our pundits war hawks. We are failing miserably in the battle of hearts and minds.

Seek the truth!

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