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Re: <nettime> Paulson's face
Stefan Heidenreich on Wed, 16 Jul 2008 18:03:39 +0200 (CEST)


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Re: <nettime> Paulson's face


dear brian & ed,

I try to give it a turn slightly back to <nettime> topics.

>> in the oil market (as demand-supply).
> Ahem, but so far, historic price increases in the West haven't dented 
> the upward curve of oil, which seems to be obeying both the classic 
> war-uncertainty scenario and also the whole new demand from the 
> above-mentioned powerhouses.

Take a look at the wheat price: all the biofuel debate and future demand asked
for a rise. But all of a sudden the debate was gone and so were the high
prizes, they came down from 1200 to 800. Oil looks almost as bubbly as that.
But the general coordinates point upwards for oil, I completely agree.
I always ask myself to which degree news and information are rather 
effects of stock prices, than actually causing them. Very often it seems 
as if a price hike triggers the according news.
The relationship of oil prices and tensions in the middle east is 
especially telling in that sense. I don't subscribe to another 
conspiracy-theory. It has rather to do with the subtle timing of 
information in a complex system, no bad guys involved.

> Mmm, I like the way you quote those numbers and since I am such a rank 
> amateur in these matters, can I ask where you get them?

Brian, being an amteur myself (and always gaining many insights from 
your comments on economy)- my recent source on money supply was an 
article by Evans-Pritchard.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/11/cnmoney111.xml

(it was the british M4 declining, US M3 is not calculated anymore, sorry 
for having mixed that in the 1st post)

 >The U.S. policy is deflationary in a sense, nonetheless, or is trying 
 >to be, in order to relieve the tension of the trade imbalance? Not 
 >deflationary for consumers but in terms of money supply.

There seems to be a debate about the power of the centralbanks and their 
steps taken. The one (FED) having lost its hegemonial position, a 
tripole of diverging policies (US, Euro, Yen) in the making, monetary 
markets suffering from carry-trades and a huge bulk of over-the-counter 
deals of unregulated implicit money: all that asks the question: What 
can a Centralbank still do?
(We all thought, they at least cannot go bankrupt, but Willem Buiter 
doubts even that:

http://blogs.ft.com/maverecon/2008/05/can-central-banks-go-broke/)

We all might very soon get affected much more than now by the 
consequences of the financial turmoils. As they enter with force the 
arena of politics and arts.
So we might take care to be well prepared for the wild ride.

> It's a wild ride, I most heartily agree!!!
> all the best to you and yours,

all the best to all of you,

Stefan


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