Wealthy Currency Traders playing mathem with the Markets ?

These are uncertain times.

But one suspects the markets are made more volatile with VHNWI (Very High Net Worth Investors) BUYING & SELLING CURRENCY in HUGE QUANTITIES.

Is this DANGEROUS ?

You bet it is...

Because a countries' currency is the very basic UNIT OF ITS ECONOMIC HEALTH.

Currency trading is based on the following premises :

Currency prices are dictated by supply and demand. That is, if there is a huge demand for, let's say, the Euro (which I am advising others to buy), obviously it jacks up the Euro price. You might even have a Euro : Dollar ratio that is not 1.2 times the actual value.

When the demands cannot be met, the price for that currency goes up.

The opposite is true.

The most intrinsic fact is that a currency of a country is a reflection of the economic health of that country itself.

Which brings us to the trillion $ question : What is the exact state of the U.S. economy ?

When Bill Gates decides on selling all his U.S. $ and buys into the Euro....is it mere speculative buying, or is the U.S. economy really falling into a quagmire ?

New South Korean President may boost economy

Lee Myung bak has been elected the President of South Korea. This will definitely give a boost to the South Korean stock markets.

And will probably start a chain reaction boost for all the Pacific Rim Countries' stock markets.

We have to remember that Lee Myung bak was a former Hyundai Group executive. Add to that, he was also the former mayor of Seoul.

So the new president has administrative as well as business credentials. In fact, the voters were deeply concerned as to which way the South Korean economy was headed.

We project a boost for the entire Pacific Rim region.

Oil Prices .......will they cross $ 100 / barrel ?

I made a decent sum of money about 25 % in 3 months investing in oil stocks around July - August. At that time crude was $ 65 / barrel........now it's hitting $ 98 / barrel & beyond.

I just sold them 2 days back.

I made this profit thanks to my financial analyst Debajyoti Dutta Roy who was pointing to a number of factors since 1 year. These factors exist even today, so I wonder what's gonna happen to oil prices ??

My advisor tells me oil prices WILL CROSS the $ 100 / barrel psychological barrier...It's just a matter of time.

Check out the facts : New York Crude has hit $ 99.29 dollars per barrel....similarly Brent North Sea touched 96.6 .....

What will push 'em up even further ?

An alarming fact is we're hitting a benchmark timeline of 2010 ...... beyond 2010 it seems DEMAND from oil will be far far greater than the PRODUCTION that can be had......

Take a look at the Hubbert Peak of Oil Production.

Add to that the ongoing Crisis in the Middle East.......it's escalating day by day.

Plus the Russia - Venezuela - China "closed circuit market" phenomenon.

Analysts are even saying crude oil might hit $150 / barrel at 2008 - end.

Google planning major EXPANSE in Europe

Google is once again showing its enormous business acumen, by expanding into Europe big time. This is sure to reap rich dividends for the company, because right now the European Union's economy is booming.

Quoting Lewis Krauskopf , Reuters & FT sources:

" Google is planning to expand its staff by a third, with most of the new hirings in Europe, the Financial Times reported on its Website.

The Web search company plans to hire several thousand engineers in Europe to create a research and development team in the region as big as in the United States, the report said.

"I aim to grow the EMEA (Europe, Middle East and Africa) engineering team as big as the one in North America. This is why I joined," the FT quoted Nelson Mattos, Google's new head of engineering in Europe, as saying.

Google's workforce ballooned nearly 13 percent between March and the end of June, growing to 13,786 full-time employees from 12,238 staff at the end of March.

The planned expansion is likely to be within the next three years, the FT report said."

Now check this out....the GDP of the EU is 1.5 times that of the US.

Plus the Euro is growing by leaps and bounds against the $.

The EU has a very large pool of extraordinarily gifted Engineers.

PLUS GOOGLE EXPANSION WOULD MEAN GREATER SERVICES FOR EUROPE, AVAILABLE FULLY IN EUROPEAN LANGUAGES LIKE FRENCH, SPANISH, ITALIAN, GERMAN, ETC....

GLOBAL STOCK MARKET SLUMP....what to do ???

The reasons behind the crash are:

Poor judgment in lending to sub-prime lenders

A general fear psychosis

Weakening of the U.S. $ against the Euro , pound & other global currencies.

A widespread worry about the oil supply / demand ratio against the backdrop of the gasoline wars.

So, what’s the forecast ?

We think the market would go down a bit…….but there’s not that need to worry. Wait till it goes down by about 5% more…..

THEN BUY INTO SOME BLUE CHIP STOCKS.

……….AND HOLD ON.

Gasoline Wars ….. the Changing Global Scenario

We are indeed at a rapidly changing scenario with respect to the rise and fall of some oil-rich countries.

Here are some excerpts from Global Envision, affiliated with the Mercy Corps, and our analysis….

“Another leader recently challenging Washington is Russian President Vladimir Putin. He threatened to point his military's nuclear missiles at European cities, if Bush extended the present California-Alaska anti-missile defense line to Poland and the Czech Republic. This threat was the latest illustration of a radical change in the Kremlin's foreign policy, with Putin repeatedly attacking Washington's stance in the international arena.”

His tough stance stems from the soaring wealth created by the extraction of Russia's enormous hydrocarbon reserves and his policy of bringing the leading Russian hydrocarbon companies under the control of the Kremlin and using them as an instrument of Russia's foreign policy.”

Our take : we are already seeing Russia putting in a missile battery system to the west of Poland, which can be a potential threat to NATO. There was also this incident of a Russian missile striking a field in Georgia, which is unprecedented since the end of the Cold War.

More…

“Four years ago Russia overtook the US to become the world's second largest oil producer after Saudi Arabia. Last year Gazprom, a Russian company, forged ahead of BP as the globe's second largest energy corporation by market value.

With petroleum prices rising fivefold between 1998 - when the Russian ruble crashed, forcing the Kremlin to beg for foreign financial aid - and now, the Russian treasury is overflowing with cash. It has since paid off its foreign loans and built up a foreign exchange nearing $300 billion.

Another example of oil riches enabling a country's leaders to act with uncommon resolve is Iran. Its refusal to suspend enrichment of uranium demanded by the United Nations Security Council has led to two sets of sanctions against it. But these have proved ineffective. Iran's exports are rising and the high oil prices mean that the government can go on using the hydrocarbon revenue on subsidies for food and fuel at home. “

Our take:

We can now see a nexus of Russia-Venezulea-Iran, quite formidable in itself….but the equation changes drastically if China also joins in. It is time to calculate what the total oil reserves plus production would be of these 3 or 4 powers....

Oil $77 / barrel & climbing….to what ?

Oil prices are at a new 11 – month high…but question is : to what levels can it rise?

The present rise is linked to :

• North Sea production problems
• Destabilization worries in the Persian Gulf
• Speculators driving in cash

So high will it rise….

Now, take points 2 & 3….

We don’t see any let up in this scenario…

Iraq is more messed up + Iran will play more hardball + the Afghanistan linked pipeline project is in jeopardy + Venezuela is reaching an oil pact with China & other countries

No less important - Speculators like you & me are flocking like hordes, caught in a “buying frenzy”.

End result ?

We are speculating it’ll rise to $90 by year-end.

Still time to buy those oil stocks….just still about a little bit time left.

Why buy more Oil Stocks ?? ….and which ones to buy ?

We know that whenever oil prices move up, so do their stocks.

Now, some experts are saying that oil production is going to peak in three years…I mean it’s all downhill from then on !

But what about the demand? The demands not going to slow down.

Also, China needs a huge quantity to meet its booming infrastructural needs.

Add to that growing vehicles in India & other South Asian countries.

Now which oil stocks should you go for?
-the behemoths, the midcaps, or the smaller ones.

Stick to the midcaps…..because the big ones might not be able to manage with logistical problems. Amongst the smaller ones, though showing initial promise, many might not be able to cope with smaller capital.

More on Oil stocks

I'll be analyzing more on which Oil Stocks are headed for a boom time.

Buy Oil Stocks NOW

Oil prices are increasing due to worries about a future Iran-U.S. showdown.

Quoting this report in Reuters :

“Iran's Oil Minister Kazem Vaziri-Hamaneh, said in Kuala Lumpur on Monday there is no shortage of crude in the market and OPEC has no plans to increase supplies, in the latest rebuff from the producers group to consumer nation calls for more oil.

"Now there is no shortage of crude oil in the market," he said when asked if OPEC should release more supplies to the market to temper high oil prices. "

"The reason for the price hike is not because of crude supply problems."

Worries over Iran's nuclear dispute with the West have been a driving factor for oil prices this year. But Vaziri-Hamaneh said the country's crude output is expected to rise to 5.3 million barrels per day (bpd) by 2014, up from 4.3 million bpd currently.”

Our take : The consumer nations’ trends, especially developing countries like China & India….are very rapid rate of increase for oil. OPEC countries’ set a quota for oil production….once that quota is set….generally they do not reverse it.

This is because the quota determines manufacturing plans, production & management plans.

1. But demand is going to be higher.

2. Also, there PROBABLY WILL BE A TENSION WITH IRAN….this nervousness will prompt some developed countries’ to get more oil to funnel it into their reserves.

This might be the right time to but oil stocks…..they are going to go up due to increased demand.

Globalization & the Global Stock Market

As globalization picks up, it is becoming imperative to keep in view the inter-relationships of the GLOBAL STOCK MARKET. The interdependencies, the “mass psychology”, the macro tradings between countries…all these come into play.