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Goldfinger

A Petrodollar Tsunami Warning

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http://www.morganstanley.com/views/gef/arc...080222-Fri.html

Oil prices just breached the psychological US$100 a barrel threshold. High oil prices will clearly boost the global capital flows into petrodollars: after all, high energy prices lead to transfers from oil importers to oil exporters. Investment decisions – both physical investment and financial investment – made by the owners of petrodollars will obviously be more important the higher oil prices are.

In this note, we remind ourselves of the broad magnitudes of the key factors we need to consider in this discussion. At US$100 a barrel, the value of the total proven oil reserves in the world is US$121 trillion, US$48 trillion of which belongs to the GCC countries. On a flow basis, annual oil export receipts of OPEC countries total some US$1.3 trillion, at US$100 a barrel. High oil prices, in short, will lead to a significant transfer of financial power to the petrodollar holders.

...

Third, bulging petrodollars will keep global long-term interest rates artificially low, in our view. As the US savings-investment deficit shrinks, excess global savings are likely to intensify, forcing the world’s cost of capital lower.

Bottom line

High oil prices will obviously increase the flow of petrodollars. But exactly how big are these flows? We calculate that the stock of the world’s proven oil reserves is now worth some US$121 trillion – close to the combined market capitalisation of global equities and bonds, with annual flows (oil export receipts) of US$2.0 trillion. While up to 10% of these receipts may be spent on infrastructure and other investments, the rest will be invested in the global financial markets. A tsunami is coming.

I think the flood is coming. But I think it won't suppress interest rates, rather cause a lot of commodities price inflation. Stock markets will stay inflated, but will grossly underperform compared with commodities.

Edited by Goldfinger

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Glad to see you taking on Morgan & Stan re interest rates GF - can you arrange to have my STR fund in a 10% IR savings account...

is that 10% youre after before or after inflation

Politicians and Inflation

One such organization is shadowstats.com. The proprietor John Williams and his team monitor much of the important data that is "adjusted" or discontinued. According to them, CPI growth for the last 12 months would have been 7.6%, if the gimmicks introduced since 1990 were removed from the calculations. And according to Williams, if the gimmicks introduced since 1980 were removed, the CPI number would have been 11.8% for the last 12 months. This is versus the published 4.3% CPI.

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Just put it in gold. That brought me 30% last year. ;)

"Past performance is no indication of future... (can't remember the next bit) but good for you with that 30%. You need a well-deserved wheelbarrow for those balls of yours.

I made 700% investing in Bolton wanderers last year. I'm King effin Kong with seventy quid in my tail.

"Just put it in gold son. There's muck in gold... or is it brass?"

I'm only cheeky when you say stupid things. You do know that? As since you seem bereft of self-awareness I'm here to be embarrassed for you.

By the way, whoever you said that to: Do no such thing unless you know there is an elephant tied to that particular string.

And up and up it goes! Wheeeeeee! Investing is easy! Investing is fun! People are stupid 'cept me. You should start a tip sheet with Dr Bubb. You guys could do Vegas.

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Just to set the record straight...

My "STR fund" went into Gold mining shares in 2001, and grew by maybe 10x since then,

and has turned into:

+ A portfolio worth mid-7 figures (in US$), and

+ 9 properties in HK, now rising in value at 1% per week (or so)

I'm laughing all the way to the bank, as various idiots say,

"Bubb, you STR-ed too early"

Look. Everyone knows you can only make serious money in UK property. No other asset class is as safe or as profitable. In 10 years every UK property owner will be a billionaire and everyone else in the world will be their serfs.

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Just put it in gold. That brought me 30% last year. ;)

I bought UKC and that bought me 300% last year! The black stuff will outshine the yellow stuff going ahead IMO.

Energy stocks may be the best place to be as everyone needs it and no one can do without it.

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"Past performance is no indication of future... (can't remember the next bit) but good for you with that 30%. You need a well-deserved wheelbarrow for those balls of yours.

I totally agree with the first part. But I also spent a LOT of time researching gold and silver. I came to a conclusion. And now I am acting accordingly.

I'm only cheeky when you say stupid things. You do know that? As since you seem bereft of self-awareness I'm here to be embarrassed for you.

My remark was tongue in cheek in a way, since everyone should know that gold is no savings account. And, thanks, I have often enough been embarrassed myself.

And up and up it goes! Wheeeeeee! Investing is easy! Investing is fun! People are stupid 'cept me. You should start a tip sheet with Dr Bubb. You guys could do Vegas.

Last time I was there, I spent $50 on gambling, and won $545. :P

Edited by Goldfinger

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Glad to see you taking on Morgan & Stan re interest rates GF - can you arrange to have my STR fund in a 10% IR savings account...

Taking on an investment bank is not difficult. They're stupid. They created this mess and went highly leveraged into it.

It only works since the taxpayers is getting forced to bail them out.

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Yeah but everyone wants out the fiat $USD so all then arabs will be left holding something simular to the German DM back in the early 1930's

Make that early to mid 1920's and you'd be absoutley spot on imo.

The dollar is not even worth the paper its written on.

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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