Minister of Minerals and Energy Defends Precious Metals Bill

Monday, October 31, 2005
FreeMarketNews.com

Minister of Minerals and Energy Lindiwe Hendricks last week responded to issues emanating from the public hearings on the Precious Metals Bill, the companion to the more-controversial Diamond Amendment Bill.

In a speech to the parliamentary portfolio committee on Minerals and Energy, Hendricks said that a key issue raised during the submissions was a need for clarity of definitions, including a suggestion that there should not be any amendments to the definition of unwrought precious metals, as contained in the Mining Rights Act of 1967.

Read the entire article at: MiningEeekly
http://www.miningweekly.co.za/?show=76673

Russia’s Quiet Natural Gas Deal With U.S.

The Russians Are Coming
by Joe Duarte, MD
Joe-Duarte.com & IntelligentForecasts.com

A quiet deal between the U.S. and Russia could change the landscape and the entire power structure in the energy markets.

Liquefied natural gas (LNG) from Russia, could be on its way to the U.S. by 2008. According to the Moscow Times, the controversial Sakhalin field could be fully operational by then, making the Murmansk port a key cog in the Russian LNG industry.

The Russian daily reported: “The legendary sea-faring route from the United States across the Atlantic to Russia's northern city of Murmansk, through which vital supplies went to the Soviet Union some 60 years ago to help the country fight in World War II, is looking to get a new breath of life. This time, however, the traffic is going to be reversed, shipping liquefied natural gas, or LNG, from Russia to energy-hungry North America.”

According to the Times, hurricane Katrina was a wake up call for Washington, leading to a new focus on negotiations. “The hurricane seems to have given new impetus to the energy dialogue between Washington and Moscow. It has also given Russia a chance to flex its muscles in its pursuit of a role as an energy superpower -- even if Russia is yet to produce its first LNG.”

The New Saudi Arabia

According to the Times, Russia’s goal is to become the world’s new energy hub, in essence the “New Saudi Arabia.”

Indeed, the fruits of the Kremlin’s war on Yukos, and the expansion of national natural gas giant Gazprom are starting to pay off. ["Russia wants to be the new Saudi Arabia in terms of global energy -- a global energy partner for consumer countries," said Chris Weafer, chief strategist at Alfa Bank, who has advised the Organization of Petroleum Exporting Countries.

Saudi Arabia has since the 1980s reaped considerable political benefits from having an energy partnership with consumer countries. "But it seems that the model that Russia is pushing is a more expensive version of that. Instead of just being a big global energy supplier shipping lots of oil ... Russia wants to be and is able to be a supplier of several types of energy ...

Read the entire article at: Financial Sense
http://www.financialsense.com/editorials/duarte/2005/1028_b.html

The Theory of Money and Credit

"Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping toward destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None, can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historic struggle, the decisive battle into which our epoch has plunged"

Ludwig Von Mises
Ludwig Von Mises (1881-1973) was the 20th century's foremost economist.
the Austrian School of Economics
The Theory of Money and Credit (1912)

Gas Prices Fact or Fiction: A Primer on Supply and Demand

by Tom Lehman

The recent upward spike in gasoline prices (particularly those following natural disasters) has unleashed a torrent of theories attempting to explain the pricing behavior in gasoline markets. From the Internet to television media pundits to the local newspaper editorial pages, and from political ideologues both left and right, it seems everyone has their pet theory about the rising price of petrol.

In an attempt to clear up some of the most erroneous ideas and to bring sound economic analysis to bear on the issue, it seems only appropriate to play a bit of "gasoline price fact or fiction" with our old friends, supply and demand.

(1) Gas prices are controlled entirely by wholesalers and big refinery oligopolists who illegally collude and profiteer at consumer expense. Fiction.

Read the entire article at:
http://www.mises.org/story/1936

Inflation gives world stock markets a fright

By Bill Jamieson

THREE questions are begged by the turbulence that has pulled down stock markets in America, Europe and the UK in recent weeks.

First, given that oil prices have been rising for two years [and have now started to ease] why has it taken so long for markets to grasp the inflation threat to growth?

Second, if global inflation is now perceived as the main risk to markets, why is it that energy and natural resource stocks in particular have fallen so sharply? Surely they should be rising, not falling?

And third, is this a temporary adjustment to prospects of slower growth or the start of a prolonged setback to the recovery of recent years?

In continental Europe, shares racked up their third straight weekly decline, with the Frankfurt Dax down 137 points, or 2.8%, on the week. Paris lost 2.6%.

London suffered a 96-point slump on Wednesday and limped home to finish the week ...

Read the entire article at: The Business Online
http://www.thebusinessonline.com/

The New Slavery: Nock on Spencer

by Albert Jay Nock

[Albert Jay Nock (1870-1945) was the great American essayist
whose anti-statism had a huge impact on the development of
American libertarian theory. This is his introduction to
Spencer's forgotten 1884 classic, The Man Versus the State.]

In 1851 Herbert Spencer published a treatise called Social Statics; or, The Conditions Essential to Human Happiness Specified. Among other specifications, this work established and made clear the fundamental principle that society should be organized on the basis of voluntary cooperation, not on the basis of compulsory cooperation, or under the threat of it.

In a word, it established the principle of individualism as against Statism — against the principle underlying all the collectivist doctrines which are everywhere dominant at the present time. It contemplated the reduction of State power over the individual to an absolute minimum, and the raising of social power to its maximum; as against the principle of Statism, which contemplates the precise opposite.

Spencer maintained that the State's interventions upon the individual should be confined to punishing those crimes against person or property which are recognized as such by what the Scots philosophers called "the common sense of mankind"[1]; enforcing the ...

Read the entire article at: Ludwig von Mises Institute
http://www.mises.org/story/1944

MOTHER OF ALL GOLD-BUY SIGNALS?

Thursday, October 27, 2005 - FreeMarketNews.com
NEWS ANALYSIS/PROPHET TALK ...

FMNN recently covered the surprising New York Times feature bashing gold miners and now an alert reader has informed FMNN that a quote from the article is quite similar to one that recently ran in the United Kingdom’s Independent newspaper ("The Real Price of Gold" By Daniel Howden, October 26, 2005) as follows, "On the back of this surge, gold prices have reached a 17-year high, and yesterday rose $7.70 (£4.30) to more than $474 per ounce. But the world's remaining gold deposits are microscopic and the environmental costs of extracting them are profound."

And here’s the Times quote, "The price of gold is higher than it has been in 17 years - pushing $500 an ounce. But much of the gold left to be mined is microscopic and is being wrung from the earth at enormous environmental cost, often in some of the poorest corners of the world." Explains our reader, “Both writers [appear to be] working off the same talking points.”

The concerted attack is even more surprising for its suddeness and aggressiveness. Its thesis is that open-pit mining’s use of cyanide to separate out gold from tons of crushed rock and earth constitutes a form of “dirty gold,” poisoning indigenous communities against their will.

Resource Investor’s “Pitpundit Blog” reported yesterday on a PBS/Frontline program accompanying the New York Times story, one that blasts giant Newmont Mines, among others, for its industrial practices.

Pitpundit points out with some astonishment that a funder of the program is mining company supplier ABB, then observes, “Sheesh, if I was Newmont I'd have second thoughts about buying from ABB next time if they're going to put their money and brand behind a bash fest targeting one of their largest customers.” The magazine also mentions the radical environmental group Earthworks whose site prominently features a link to “No Dirty Gold.”

This ‘Net forum – seemingly appearing out of nowhere - is, in fact, specifically set up to generate support against “dirty” mining companies, those reportedly exploiting the environment and indigenous peoples. No Dirty Gold lists numerous allies in its campaign on “dirty” mining including various “Friends of the Earth” groups, Greenpeace and the Environmental Defense Fund. The President and CEO of Earthworks is himself from Greenpeace.

According to the Earthworks bio, boss Stephen D'Esposito, “was instrumental in building Greenpeace USA into one of the largest environmental groups in the U.S., from 1986 through 1992.” Earthworks also has ties to some of the most prestigious and powerful non-profit grantors in the business.

A prominent member of the board of directors of Earthworks is Michael E. Conroy who turns out to be the “program officer” for the Rockefeller Brothers Fund. A quick crosscheck shows that fully ONE THIRD of the names of No Dirty Gold “Campaign Allies” would seem to have received Rockefeller Brothers bequests in the 2000s.

These include Greenpeace and various “Friends of the Earth” - No Dirty Gold Campaign Allies all. The ABB/PBS funding connection that Resource Investor is astonished about may also be explained via a Rockefeller connection as Jürgen Dormann, chairperson of the board of ABB, is also chairperson of the management board of Aventis – a pharmaceutical company that received funding from I.G. Farben/Rockefeller after World War II. (Ties, actually, are greater than the scope of this article allows.)

Free-market observers who believe in gold are not at all downcast by this concerted attack on the gold-mining industry, citing it as a buying ...

Read the entire feature article at: FreeMarketNews
http://www.freemarketnews.com/WorldNews.asp?nid=1526

U.S. Dollar, Precious Metals, Energy Update 27.10.2005

October 27, 2005 - Thursday Market Update

Dollar/Gold:
The dollar was lower against other major currencies in European trading today. Gold prices rose. In London, the British pound was quoted at 1.7831 dollars, up from 1.7749 late yesterday. The euro was quoted at 1.2143 dollars, up from 1.2071.

Other dollar rates in Europe, compared with late yesterday:
115.21 Japanese yen, down from 115.76 1.2740 Swiss francs, down from 1.2819 1.1680 Canadian dollars, down from 1.1706

Gold closed in London at 472 dollars and 80 cents an ounce, up one dollar from yesterday. In Zurich the late price was 473 dollars and 15 cents, up 25 cents an ounce.

###

ROAD KILL
Thursday, October 27, 2005

Over the past couple of weeks crude oil prices have plummeted on the NYMEX [exchange] in N.Y. After a long and pronounced run up in prices from approximately 20 or so dollars a barrel a few years ago – the recent respite in petroleum prices is viewed by many as welcome, relief and necessary – take your pick.

For anyone who regularly consumes business related news from such illustrious sources as CNBC, CNN or any of their trusted major newsprint media outlets – you are likely more than well aware of the ravages caused by the hurricanes, Katrina and Rita, which recently ravaged the U.S. Gulf Coast.

Over the past few weeks [ending Oct. 20/06 at the time of writing], the Energy laden Toronto Stock exchange’s Energy sub index has now receded close to 20 % - all seemingly on the back of recently cascading [NYMEX] futures prices for crude oil, distillates and natural gas.

It has been reasoned, heck argued, through these venerable news outlets – time and time again – that the rising prices of said commodities have in effect sown the seeds of their own declines, and all is either fine or returning to normal. The age old reasoning, of course, is that rising prices lead to lessened demand and a resultant fall in prices – all economics 101 stuff that few would argue.

Reality Bites [and tells a different story]

The real story, however, happens to be somewhat different than the one espoused by the mainstream media – who at this point seem more intent on keeping the flock placid than informed. Reality [where we – the seemingly the last to know - work and reside] is perhaps better depicted by the following budding crisis in PVC [pipe] market. For those who may not be aware...

Read the entire article at: FreeMarket News
http://www.freemarketnews.com/Analysis/106/2739/2005-10-27.asp?wid=106&nid=2739

###

No quick fix for Gulf oil output
Interior Secretary Norton says crude production won't return to normal "for many months."
October 27, 2005: 12:10 PM EDT

NEW YORK (Reuters) - Repairing all the damaged rigs, platforms and pipelines in the Gulf of Mexico in the wake of hurricanes Katrina and Rita will take up to a year and crude oil output will not return to normal "for many months," U.S. Interior Secretary Gale Norton said Thursday.

In written testimony for a Senate Energy committee hearing, Norton said about 45 percent of oil and gas pipelines in the Gulf were operating, while 30 percent need repair. Another 25 percent were undamaged but could not be used due to "downstream problems."

In addition, 16 natural gas processing plants, which purify gas before it can be shipped to customers, remained closed.

Earlier Thursday, Royal Dutch Shell said production from its Mars platform in the Gulf would not resume until the second half of 2006 because of damage from Katrina. BP's (Research) Thunder Horse, originally scheduled to come online in 2005, will not begin producing oil and gas until late 2006.

As of Wednesday, 68 percent of the Gulf of Mexico's 1.5 million barrels per day of crude production capacity was shut along with 56 percent of the region's 10 billion cubic feet per day of natural gas production, according to the U.S. Minerals Management Service.

Read the entire article at: Money.cnn.com
http://money.cnn.com/

Pre - U.S. Market News - Gold Fell On Strong US Currency

24.10.2005 11:10

Gold fell in Asian trading as a rising dollar triggered selling by Japanese speculators seeking to lock-in gains, Bloomberg.com reported.

Gold gained 1.2 percent on Oct. 21, the most since Oct. 6. on rising US dollar, which erodes bullion's appeal as an alternative investment to U.S. stocks and bonds.

Gold for immediate delivery fell as much as $1.90, or 0.4 percent, to $464.99 an ounce after closing Oct. 21 in New York at $466.89. It traded at $465.25 at 11:43 a.m. Sydney time.

October 24 Stock Commentary

October 24, 2005 Stock Commentary
By Benjamin TrainOctober 23, 2005

The market is setting up for another very volatile week and the next big short-term reversal to the upside. I am also seeing a short-term cycle low in the DOW and the NASDAQ this week to further consolidate the markets equities in several sectors.

This is the right time to enter precious metals (PM) mining and stocks for the large upside ahead over the next few weeks. The Fed's inflation vigilance persists in the manipulation of the futures market with hedge funds waiting on the side and retail buyers wondering when the pain will end.

According to Gene Arensberg with the Resource Investor, ( http://www.resourceinvestor.com/ ), "Judging by the COT and technical signal “tea leaves” caution flags remain flying, but the odds may be shifting back in favor of the bulls. Confirmation (or not) of the Friday attempt at support in the $460 range is the key development to watch for in the coming week."

I will be adding to my PM positions in AUY, CDE, NG, SA, WTZ and HMY. I am also adding to my copper position with PCU. Even though I saw retail buyers of the PM stocks last week, I believe they where ahead of the 50 and 200 day curve and responding to a slight rally during options expiration.

CAT with a high target of $72.00 may see a little further decline before I add more shares near my target of $49.10-$48.45 range.

Even though the energy sector looks oversold, CVX has some long-term buy signals going off along with XOM from the Institutional sector side, some of which are coming from a Natural Gas deal potential. Look for energy company earnings reports to look great, but remember that you are buying up against the Fed's, and the seasonal trends declining futures market prices.

The only thing that will drive another energy rally this year is another disaster in the supply line. The hurricane may drive a short-term rally for TSO and VLO. I will be watching and adding additional shares of NGS, NGAS, SWN, SWSI this week. CHK is a must along with BTU after the consolidation.

In the Biopharm sector ELN, BIIB, AVN and PTN are on my buy list for additional shares, purchased on dips. GSK almost looks ready for a buy signal near their 50 day moving average of 49.80, but I'd wait and see if their 50 day is more of a solid buy.

Take note of Elan's Latest News regarding the FDA priority review application status
from NCB’s online Irish Equity Stock Guide October 24, 2005:

Elan $8.12 BUY Clarification On Priority Review Timeline for Tysabri

• One note of clarification on the priority review timeline for Tysabri.
It was previously understood that the FDA would respond to BiogenIdec/Elan's
request for priorityreview within a 30-day period.

• We now understand that the FDA has up to 60-days from the date of
submission to respond to this request (a decision is now expected by 25th November).

• The timing of the priority review decision will not impact the time the FDA
will take toreview the sBLA file (6 months from the date of submission for
a priority review or 10months from submission for a standard review).

Excerpt from Elan's page on NCB’s online Irish Equity Stock Guide By Orla Hartford +353 1 611 5844

A Russian Giant Tromps Onto The World Stage

Gazprom is boosting natural gas exports
and opening up to foreign investors

By Jason Bush in Moscow
OCTOBER 19, 2005

Does Gazprom have a U.S. business in its future? With two-thirds of its production going to the home market, the Russian natural gas behemoth traditionally has been more of a domestic and regional player than a global one. But now it's laying the groundwork for a multibillion-dollar project that will enable it to ship liquefied natural gas (LNG) in tankers from the Arctic Circle to North America by 2010. "Gazprom is implementing a new strategy to become a global energy company," says Gazprom spokesman Sergei Kupriyanov.

At the heart of the plan is the giant, undeveloped Shtokman gas field in the Barents Sea, 560 kilometers off Russia's northern coast. To get at the 3.2 trillion cubic meters of reserves, Gazprom is working to bring in Western energy companies as partners to build LNG facilities. The foreign businesses will own up to 49% of the project, which is expected to cost $10 billion to $20 billion.

Among the hopefuls: Chevron (CVX ) and ConocoPhilips (COP ) from the U.S., Statoil (STO ) and Norsk Hydro (NHY ) from Norway, and France's Total (TOT ). Early next year, Gazprom is scheduled to make a decision on which two or three will be the winners. "Every oil-and-gas company is interested in getting more reserves, and Shtokman is a huge field," says Henrik Carlsen, senior vice-president for the Barents region at Statoil.

The potential to export to the U.S. is another attraction: "If we look at Shtokman's position, it's closer to the U.S. east coast than [are] gas fields in the eastern Mediterranean and the Middle East," Carlsen says. In 2005, U.S. gas import prices have been about six times higher than those Gazprom fetches in Russia. And demand is soaring. The U.S. consumes a quarter of the world's natural gas supply, and the U.S. Energy Dept. forecasts that, by 2020, LNG imports will account for a fifth of gas needs, up from 3% now.

FLOWING TO BRITAIN

The Russians also are spending big money to ramp up export capacity to Europe. On Sept. 8, President Vladimir V. Putin signed a landmark deal with German Chancellor Gerhard Schröder to begin work on a 1,200-km pipeline under the Baltic Sea from northwest Russia to north Germany. The line, due to open in 2010, will cost around $5 billion to build and eventually carry 55 billion cubic meters of gas a year. The idea is for Russian gas to reach other northwest European markets, including Britain. Gas in Western Europe currently fetches prices around five times higher than at home, so boosting exports to the region is crucial to increasing Gazprom's revenues.

Gazprom and its Kremlin masters are also keen to raise Gazprom's international standing by reaching out to foreign investors. Putin recently reiterated a promise to let foreigners freely invest in Gazprom stock, saying restrictions on foreign ownership would be lifted by the end of this year. That would turn Gazprom into a must-have stock for international portfolio managers, boosting its $100 billion market capitalization.

Gazprom's plans to boost exports and open up to investors make good business sense, but they won't necessarily turn the company into a world-class player. Even after shares are made available to foreigners, the state will retain a controlling 51%, and concerns about Gazprom's efficiency are sure to linger.

Critics note that Gazprom's pipeline construction costs are around three times the industry standard. Its drilling costs are about 50% higher than in North America. "By and large, they're still operating on Cold War infrastructure and Cold War economics, and need to adjust to a new world," says William F. Browder, CEO of Hermitage Capital Management, the largest portfolio investor in Russia. Even so, the world seems eager for what Gazprom has to offer.

China Builds Its Dreams, and Some Fear a Bubble

By DAVID BARBOZA
Published: October 18, 2005

SHANGHAI, Oct. 16 - Move over, New York. This year alone, Shanghai will complete towers with more space for living and working than there is in all the office buildings in New York City.
That is in a city that already has 4,000 skyscrapers, almost double the number in New York. And there are designs to build 1,000 more by the end of this decade.

China's real estate market is so hot that miniature cities are being created with artificial lakes, and the country's nouveau riche suddenly seem eager to put down as much as $5.3 million for a luxury apartment in skyscrapers with names like the Skyline Mansion.

For decades after the Communists took over in 1949, there was relatively little housing construction or office building under central planning. But since the early 1990's, Shanghai and other cities have been making up for lost time. And this year the building boom is at a frenzy, with the nation expected to lay down the finishing blocks on 4.7 billion square feet or more of construction, a record, up from 2 billion in 1998.

"There's no doubt what is happening in parts of China is on a scale we've never seen before," said Richard Burdett, professor of architecture and urbanism at the London School of Economics. "But more importantly, it's the fastest pace of development in the past 50 or 100 years."

In Beijing, the remains of an old Taoist temple now stand in the middle of the parking lot of a new mall more than twice the size of the Mall of America. Big developers are acquiring huge swaths of prime land in the largest cities to build huge residential campuses with kitschy names like Cloudland Water Manor, Eastern Venice, Palais de Fortune and Skyway Oasis Garden.

Such developments dwarf anything being built today in the West. "I'm working on a master plan for a 46-kilometer riverfront area," said Robert Egan, who runs a landscape architecture firm in Beijing called PlaceMakers. "Scale like that doesn't happen in the U.S."

It is not uncommon to see a residential development with 10, 20 or even 30 identical high-rise apartment buildings clustered around sculpted green spaces and artificial waterways.

For increasingly wealthy Chinese, the American dream of a home and a yard has become more like a French villa with a community lake, a town square, a post office, a hospital, a cinema, a church, a hotel, a shopping mall and, of course, a power plant.

A top-of-the-line unit at one development project has a 25-acre palm-shaped artificial lake, which brochures say will feature docks with berths for private yachts.

Prices are soaring. Luxury apartments in Shanghai and Beijing with names like Home of the Tycoons now sell for prices comparable to some high-end properties in New York.

Rising prices have created a circus-like atmosphere in parts of China. Real estate fairs are mobbed, land speculation is rampant and some poor farmers dream about converting their wheat fields into the next Beverly Hills.

Indeed, prices have risen so fast over the last few years and the pace of building has been so furious here and in other large cities that the government and some leading economists have been warning about a huge property bubble in China.

The building boom is a principal reason that China is searching around the world for energy and natural resources: it needs the raw material to build new cities, and the energy to power them. That is helping drive up world commodity prices and threatening global environmental damage.

China's heavy reliance on coal to power its overcharged economy has already made it the world's second-largest producer of greenhouse gases, after the United States. And the World Health Organization says China has 7 of the world's 10 most-polluted cities.

The construction boom is also beginning to wipe out what little is left of the old China, alarming historic preservationists. Indeed, as the world's most-populous country, at 1.3 billion, rapidly modernizes and urbanizes, producing millions of new homeowners, its social and economic fabric is being fundamentally altered.

China's housing rush is being fueled by mortgage rates around 5 percent and huge inflows of foreign capital. But the boom is also driven by landmark government housing reforms from the 1990's that for the first time since the Communist revolution of the late 1940's allowed Chinese to acquire their own homes rather than live in government housing.

As a result of this privatization, thousands of new residential projects are rising in the bustling coastal provinces. And sprawling satellite towns and luxury villa developments are sprouting in what was once farmland.

This may just a suggestion of what is ahead. China expects 75 million more farmers to move to cities over the next five years, amounting to one of the biggest mass migrations in history, according to CLSA, a brokerage house specializing in the Asia-Pacific region.

"China's demand for housing is just getting going," says Andy Rothman, a CLSA analyst in ...

Read the entire article at the NY Times: http://www.nytimes.com/2005/10/18/business/worldbusiness/18bubble.html

Last Minute Crude Oil Breakout

Stocks soared Wednesday Afternoon

Speculation that another tornado could cause disruption in oil and refining, caused a last minute breakout before the bell, erasing energy losses for the days market traders. The Dow Jones industrials gaining 128 points on an ealier sharp drop in oil prices and a reassuring assessment of the economy helped investors overcome their disappointment over Intel Corp.'s earnings and troubling sales forecasts.


COMPONENTS FOR XOI

Symbol Name Last Trade Change Volume
AHC AMERADA HESS CP 119.05 4:02PM ET +2.90 (2.50%) 2,194,100
BP BP PLC 65.34 4:01PM ET +1.08 (1.68%) 5,597,800
COP CONOCOPHILLIPS 61.55 4:02PM ET +1.47 (2.45%) 10,990,700
CVX CHEVRON CORP 58.34 4:00PM ET +1.05 (1.83%) 12,145,100
KMG KERR MCGEE (HLDG CO) 83.17 4:03PM ET +0.94 (1.14%) 2,896,700
MRO MARATHON OIL CORP 60.02 4:01PM ET +1.15(1.95%) 4,515,900
OXY OCCIDENTAL PET 73.61 4:01PM ET +2.15 (3.01%) 5,544,200
REP REPSOL YPF S.A. 29.97 4:08PM ET +0.63 (2.15%) 300,000
SUN SUNOCO INC 70.51 4:02PM ET +0.86 (1.23%) 3,561,900
TOT TOTAL S.A. 125.00 4:03PM ET +2.96 (2.43%) 999,300
VLO VALERO ENERGY CP 98.98 4:00PM ET -0.89- (0.89%)15,969,100
XOM EXXON MOBIL CP 57.17 4:01PM ET +0.87 (1.55%) 30,831,000
STO STATOIL

Make Yourself Recession-Proof

By Lewis Schiff

Question of the week

A friend of mine argues that the hits to the economy from Hurricane Katrina, the Iraq war and high gas prices mean that a recession is just around the corner. What do you think?

What do Hurricane Katrina, skyrocketing energy costs and higher inflation and interest rates mean for the U.S. economy? If you poll ten different economists, you'll probably get ten different answers. But one thing is certain: Many people are worried.

Just two comments from members of the Armchair Millionaire community highlight this concern:

"I'm not smart enough to know where the nation's economy is going in the near future. I'm more concerned about what I see around me in individuals who are deep in debt, digging deeper and not saving a dime." --kirkisms

"I read somewhere that each American owns over $120,000 of American debt. How can a country survive such an economic situation? Our financial survival is based upon assumptions that may whither with an ongoing war effort, with disasters like Katrina, and with increasing costs such as that of oil. I predict a recession will be forthcoming within the next three years." --Chris

While you can't control the direction of the economy, you do have a lot of control over your personal financial situation. We may not see a 1929-style crash again, but short-term bumps in any economy are inevitable. My guide will show you how to ride them out.

The Armchair Millionaire's Guide to Making

Yourself Recession-Proof

Keep cash on hand. When the chips are down, cash is king. Nothing is better for seeing you through a recession or unexpected job loss than an emergency fund. Aim to have at least three months' worth of expenses stashed away in a money market fund. Six months' worth would be even better.

Don't get in over your head on fixed expenses. If you stretch yourself too far when you take out a mortgage or car loan, you could be in trouble down the road. By making those big, fixed expenses well within your reach now, you'll have some cushion in the future should your income drop.

Don't overextend yourself. Just because you have a $50,000 home equity line of credit doesn't mean you should use it. Likewise with the credit available on your credit cards. By leaving yourself room to use credit when you really need it, you'll be much better able to weather an economic downturn.

Keep your skills current. Especially if you work in an industry that ...

Read the entire article at: Armchair Millionaire

http://www.armchairmillionaire.com/features/ask_recession_10.18.05.shtml

Federal Reserve and Treasury Department Manipulates the Price of Gold Stocks

The private Gold Antitrust Action Committee GATA has uncovered evidence suggesting that the Federal Reserve and the Treasury department, operating through the Exchange-Stabilization fund and in cooperation with the International Monetary Fund, have been systematically working to deflate the price of gold. Because rising gold prices are seen by investors as a barometer of inflation, the Fed has purportedly suppressed prices to disguise the true nature of the financial bubble of the 1990s.

Congressman Ron Paul said in a Media Release in 2002 "The Fed wants all of us to think the stock market is not overvalued, and that credit and monetary expansion can create lasting prosperity" he went on to say "gold prices should always serve as an unbiased indicator of the true health of world markets."

EXCERPT FROM PRESS RELEASE:
"The Constitution grants authority over monetary policy specifically to Congress alone, not to the executive or the administration," stated Congressman Ron Paul of Texas in 2002. "Yet Congress has neglected its duty for decades, and now our foolish fiat money system is run without challenge exclusively by unelected Treasury and Fed bureaucrats. As a result, the Treasury has been able to engage in the buying and selling of gold to manipulate the worldwide market price. Gold is very important to markets and investors in America and across the globe, and Congress should not allow the administration to interfere in the gold market behind closed doors."

Oil prices rise on new storm fear

Monday, 17 October 2005, 19:56 GMT 20:56 UK

Oil prices rose by nearly 3% a barrel on Monday, as dealers grew nervous about the possibility of another storm hitting output in the Gulf of Mexico.

Tropical Storm Wilma, caused by a depression in the Caribbean, could move into the Gulf by Friday, said the US National Hurricane Center.

It comes in the wake of hurricanes Rita and Katrina, which shut US oil facilities. Six remain closed.
US crude was up $1.73 at $64.36 and Brent crude up $1.09 at $60.57.

However, prices are still off the August highs of above $70 a barrel.

Iran concern

A heightening of tension in Iran - the fourth-biggest global producer - also buoyed prices after bombings in the oil city of Ahvaz.

The latest storm is predicted to move toward the Yucatan peninsula in Mexico on Thursday, then reach the Gulf at the end of the week.

"In the present situation, this storm is bound to keep the market on edge," said Kevin Norrish, an analyst at Barclays Capital.

He said prices of gasoline and heating oil would be particularly sensitive if the storm hit.

In the meantime, US gasoline prices fell again last week, with the cost of regular unleaded down 12.3 cents to $2.73 a gallon, according to the US Energy Information Administration's weekly report.

The national pump price has fallen 20 cents in the last two weeks, but is still up 69 cents from a year ago, it said.
Meanwhile, Opec, whose member nations are already producing at the maximum of their capacity, revised down its 2005 forecast for growth in world oil demand by 200,000 barrels per day to 1.2 million bpd.

We're Nowhere Near a Recession, but ...

John Waggoner, USA TODAY
Fri Oct 14,10:03 AM ET

Pimco's Bill Gross says there's about a 50-50 chance of a recession next year. If he's right, then you can take steps now to shore up your finances and your portfolio.

The shorthand definition of recession is two consecutive quarters of declining gross domestic product. In reality, a recession is more than just two bum quarters. "It can't just smell like a recession - it has to smell, look and taste like one," says Ken Goldstein, economist at The Conference Board's ( http://www.conference-board.org/ ) Bureau of Economic Analysis says GDP increased at a 3.3% annual clip from April through June 2005. The Conference Board's index of coincident economic indicators rose in August, the most recent reading. Coincident indicators show what the economy is doing now.

But the future isn't looking bright. The Conference Board's leading indicators, which try to show what will happen in the future, declined in July and August. It's a good bet they will have fallen in September, too, Goldstein says. "To the average guy in the street, come the holiday season, it could feel like a recession," he says.

Lower consumer confidence is one reason the leading indicators fell. Consumer confidence in September took its biggest one-month plunge since 1978, according to the University of Michigan. Big drops like that are often associated with recessions. Two-thirds of all consumers surveyed expected bad times ahead, and half expected higher unemployment.

Most expected higher interest rates, which is where Bill Gross comes in again. "Higher energy costs plus higher interest rates increase the risk of recession," Gross says. Oil prices, although down from their post-Katrina peak, are up 45% from the beginning of the year. The Federal Reserve ( http://www.federalreserve.gov/ ) has raised its key overnight fed funds rate 11 times since June 2004, to 3.75%. Gross thinks more increases are on the way.

One reason the Fed is raising rates, Gross argues, is to deflate the housing bubble. If mortgage rates follow the Fed's cue, fewer potential buyers will qualify for mortgages. But deflating a bubble gently isn't easy, particularly with crumbling consumer confidence and soaring energy prices. "If housing cracks and falls hard, we've got a recession," Gross says.

Chart of Real Estate Loans at All Commercial Banks:
http://research.stlouisfed.org/fred2/series/REALLN/100/Max

You can't really get out of the way of a recession, so your best bet is to prepare for it. The best two recession-proofing moves for your personal finances:

•Pay off your credit card debt. This is always a good idea, but if you lose your job, you'll have one less bill to pay - and a source of last-ditch emergency cash.

•Increase your cash. Financial planners recommend that you keep enough cash in money funds or bank CDs to pay three to six months' worth of bills. That's an enormous amount of cash, and probably more than you want. But it's good to increase your liquid assets if you feel your job is in danger.

Your portfolio will need some rearranging, too, and adding cash is a good idea. Cash not only cushions downturns in the stock market but gives you a buying reserve when the economy turns up again. You can find six-month CDs that yield more than 4% - and rates will likely be higher in six months.

If you invest in bonds, you should avoid junk-bond funds. These invest in high-yielding bonds issued by companies with shaky credit ratings. These are exactly the kind of companies that default on bonds in a recession. "It's not a great time for high yield," Gross says.

Instead, look for funds that invest in short-term bonds issued by rock-solid companies. Long-term bond prices get whacked when interest rates rise.

Traditionally, food and medical stocks fare best in a recession: People still have to eat and stop coughing in hard times. But most stocks get hurt in a slowdown. Your best investment now might be a stock fund with lots of cash. Five of the top performers are in the chart. They can help improve your odds of good returns if the economy rolls snake eyes.

John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. Click here for an index of Investing columns. His e-mail is jwaggoner@usatoday.com

China Finance Talks Target Energy Prices, Balancing Growth; U.S.-China Talks to Begin

Saturday October 15, 8:36 pm ET
By Elaine Kurtenbach, AP Business Writer

XIANGHE, China (AP) -- The threat from high oil prices and lagging growth in poorer nations topped discussions at talks outside Beijing due to wrap up Sunday with a statement by top financial officials of the world's leading economies.

The annual summit of the Group of 20 major industrial nations was to be immediately followed by China-U.S. economic talks that were expected to yield more pressure on Beijing to loosen controls on its currency, the yuan.
U.S. Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan were leading the delegation of top economic experts from the administration of President George W. Bush.

Treasury officials said in Xianghe, a heavily guarded fortress-style resort an hour's drive outside Beijing, that they intended to intensify and broaden the debate over China's economic reforms, urging China to further develop domestic demand and financial services -- as well as allowing greater flexibility for the yuan.

The talks are part of an effort to redress the record trade gap between the two countries, which surged to US$162 billion in China's favor last year and is forecast to exceed that figure this year.

"If we truly want to deal with these imbalances bilaterally or multilaterally, you need to focus on more than just the currency," said U.S. Treasury Undersecretary for International Affairs Tim Adams.

"What we have tried to do is take a quantum leap in sophistication and scope so that we can with Congress and with others have a much more informed discussion of how we actually get these things done," he said.
Critics of China's currency policy contend the yuan is undervalued by as much as 40 percent, giving Chinese exporters an artificial price advantage, and that this is a major factor behind the trade imbalance.

Chinese officials say they cannot move any faster in currency reforms after having revalued the yuan by 2.1 percent in July, at the same time giving up a decade-old peg to the U.S. dollar and switching to a basket of major currencies that also includes the Japanese yen and euro. The currency has gained only about 0.3 percent in value since then.

"I don't think that will work toward their interest," Li Ruogu, chairman of the Export-Import Bank of China and a former central bank vice governor, said Saturday of the U.S. pressure.

"China acts as a crucial engine for the whole world and to damage the Chinese growth and Chinese economic development will do no good for anyone," Li told Dow Jones Newswires.

In opening the G-20 meeting, Chinese President Hu Jintao decried the widening divide between the industrialized world and the least developed nations, financial crises and "new manifestations of trade barriers and protectionism."

The talks, which include the Group of Seven industrial nations, leading developing countries and international institutions such as the World Bank and International Monetary Fund, addressed a wide range of issues, including concerns over the prolonged surge in crude oil prices, which are hovering above US$60 a barrel.

Beijing expects the G-20 gathering, whose participants account for 90 percent of the world's gross domestic product and 80 percent of all trade, to issue statements on reforming the international monetary system and on development issues, state media reported.

Securing a stable supply of oil is a major concern for China, whose imports have surged as its economy grows at an annual rate of more than 9 percent.

Delegates to Saturday's talks raised "many good proposals" for financing an IMF program to aid economies badly hit by high oil prices, IMF managing director Rodrigo Rato told reporters.

Rato said high oil prices were bound to persist, posing a threat to stable world growth.

World Bank President Paul Wolfowitz on Saturday urged wealthy nations to make concessions on farm trade to help salvage stalled World Trade Organization negotiations for the sake of the world's poorest 1.2 billion people.
"The solution has to come from opening markets," he said. "These people need aid but more than aid they need a place to sell the products of their work. Otherwise they'll be aid dependent forever and that's not a solution."

Chavez: World Faces Major Energy Crisis

Saturday October 15, 7:15 pm ET
By Ciaran Giles, Associated Press Writer

Venezuela Leader Says World Faces Major Energy Crisis; OPEC Members Unlikely to Boost Production

SALAMANCA, Spain (AP) -- Venezuelan President Hugo Chavez said Saturday that the world faces an energy crisis but there is little chance of his country and other OPEC members increasing production because they are already pumping near "their capacity."

"The world will have to get used to a barrel price, I think, of above $50, and energy will have to be saved," he told reporters as leaders from Spanish- and Portuguese-speaking countries met in this central Spanish town.
After soaring in August, crude oil prices have been between $60 and $70 a barrel for more than a month.

"We're at the doorway of major energy crisis worldwide," Chavez said. "We'll have to develop other resources such as wind, solar and nuclear energy -- naturally for peaceful purposes." He said Venezuela was in talks with Argentina and Brazil regarding nuclear power.

"Prices will continue to rise but oil is running out," he said.

Chavez said a "lack of imagination in the United States and the war in Iraq, which has destabilized the market in the Middle East, has also driven up prices." Increased demand from countries such as China and India is making the problem worse, he said.

"The whole world right now is producing petroleum at their maximum capacity," he said. "In Venezuela, for example, we can't produce a single barrel more."

Venezuela, a member of Organization of Petroleum Exporting Countries, is the world's fifth largest oil exporter and a major supplier to the U.S. market.

Venezuela's state oil company, Petroleos de Venezuela, says it pumps 3.2 million barrels of crude oil a day. But industry analysts put the figure lower, saying the country has never fully restored output since an extended strike in 2003 that sought to force Chavez's resignation.

Increased production would not solve the price problem, Chavez said.

"The cause of the increase in the price is not in the production. It's partly the intermediaries who make things dearer. It's also because of the increase in demand and the irrational capitalist consumerism model," he said.
"The United States for example, with scarcely five percent of the world's population, uses almost 25 percent of the petroleum and combustion fuels produced in the world," he said.China Finance Talks Target Energy Prices

Silver Users Association Blocks Silver Price Explosion

Friday, October 14, 2005 - http://www.FreeMarketNews.com

The Silver Users Association (SUA) is urging the Securities and Exchange Corporation (SEC) stop Barclays from creating a silver backed Exchange Traded Fund, according to Reuters. In a desperate move to block the ETF, the association made a plea to the SEC that argued that the economy could suffer if silver prices spike.

Barclays filed a registration to create the first silver ETF, however it is still pending regulatory approval. The Silver ETF would be similar to the popular gold ETFs, which are responsible for purchasing about 250 tons of gold worth $3.4 billion. The trust would take delivery of millions of ounces of silver bullion and store it in England. However, some speculators believe that there isn’t enough silver stored above ground to fulfill investment demand for a silver ETF. If the ETF is blocked for this reason, it could be seen as a bullish confirmation for investors.

The SUA was created in 1947 to lobby for companies that purchase and consume silver. Admitting that supplies are tight, the SUA fears that taking silver from exchange warehouses could be enough to set off a shortage. “We don't endorse a silver ETF because of the potential liquidity problems it would create,” the SAU wrote.

The admission by the SUA is astonishing given that all the major players in the silver industry have maintained for a number of years that the silver is plentiful and that the analyses of silver bulls as regards supply were wrong. In admitting that supplies are tight, not only does the SUA vindicate a long-standing argument of the silver bulls it also comes perilously close to an admission that the market has indeed been controlled by...

Read the entire article at:
Free-Market News Network
http://www.freemarketnews.com/WorldNews.asp?nid=1330

An Economic Colossus in Crisis

by Peter Navarro & Matt Daviofor
Online Trading Academy
http://www.tradingacademy.com/

Navarro's Market Rap: An Economic Colossus in Crisis

"No government anywhere in the world can go on taxing and spending as if its is still operating in yesterday's economy." … "If the United States is to remain an economic colossus, its fiscal authorities, like its central bankers, will have to become paragons of prudence and restraint, implementing policies that will put the nation in a position to bolster, not hamper, its competitive edge."

Richard W. Fisher, President and CEO, Dallas Fed

Two weeks ago, when I argued that the short side of the market indices now have a better risk to reward than the long side, I took a broadside from a few ungentle readers – and a public whipping on KNX for my bearish perspective. Well, excuse me. As the market got further unglued last week, I continue to believe this is the case and will judiciously add to my Nasdaq short.

And by the way, many analysts and pundits are blaming rogue remarks from the Dallas Fed President for last week's market fall. Guess what: It's not what he said. It's what he (and me) is seeing. With sustained energy and commodity price shocks and a rising structural budget deficit, we are being set up for a rerun of 70s style stagflation.

The Week Ahead:

A typically Meaningless Jobs Report.
Discriminating minds might find the Fed minutes to be an interesting read next week – what with all the Fed hoopla. That said, the big report of the week will likely be the trade report. Any unexpected increase in the deficit will lead to weaker dollar-more inflation worries and feed the inflationary worries scenario. Retail sales on Friday and the U Mich sentiment numbers are also always worth watching.

Peter's Portfolio: Shorts and Longs

My cubes short is now slightly in the green while SVA continues to ramp up – albeit with a little healthy profit taking last Friday. Still looking to add to ARDI this week. Watch it now because if it starts running up in anticipation of the Oct. 27 earnings call, you know that the insiders are making a buck.

Holding ARTX, ASTM, LVLT, EWG, and EWJ. Sure would like to get a little inspiration for a new stock but the fact that I ain't seeing anything is an indicator in and of itself….

Hedging Your Bets With Matt Davio: That Was Then…

To look forward, we sometimes need to look back. But one lifetime is not enough. Call me old-fashioned, but the years of the roaring '20s and the stock market and huge spending boom which preceded the 1929 top do seem to foreshadow the period we are living through now.

After the Tech and Internet Boom of the 1990s, the market peaked and the stock market bubble burst. We now remember 2000 ushered in a two year plus stock market slide, but nothing to rival the Wall Street Crash of 1929-1932. The generosity of our modern Federal Reserve has, so far, saved us from a slide into economic crisis. People have kept spending, using cheap borrowed money, and easy credit supported by rising house prices. As I write this, the property bubble is still growing, and our American dream of never-ending abundant times are still intact. In those older days of my grandfather's youth, people were also ambitious and optimistic. They traded up when possible, and borrowed money if needed, in order to improve the quality of their lives.

Within a few months, the economic climate had changed, and my grandfather lost his job, making it impossible to keep up the payments on a new car along with the new cars of many other unfortunates who also lost their employment and their regular wages. And with the job losses, the stock market crash of 1929 morphed into a severe downturn in the economy.



The slowdown was aggravated by a collapse in credit. In the roaring twenties, it was easy to borrow money, for building new homes or buying new cars. Some, like my grandfather who had worked as a mason, got credit beyond what that they could readily service. So when the work dried up, and money got tight, the payments became impossible. In the thirties, America became glutted with repossessed cars and houses for sale. Demand for new products faded, and the wheels of industry slowed to a crawl.

In Greenspan's case, the motion he is seeking is that of dollars, since the economists of our time bizarrely measure growth in our economy in terms of spending, not in the number of jobs being created domestically. Greenspan's wheel was set in motion in the 1990s and early years of this new century, when the Fed made repeated cuts in interest rates. Lower rates, have worked like the accelerators on the economic ...


Read the entire article at: FinancialSense.com
http://www.financialsense.com/editorials/odonnell/2005/1011.html

Gold Stocks - or Gold STACKS?

by Alex Wallenwein, Editor & Publisher
The Euro vs Dollar Currency War Monitor

Gold powers ahead and its paper-derivatives, mining stocks, lag behind - once again.
Same story as last year - or is it?

Which should you be in? Stocks, or stacks?
Here is a gut level test: Which one sounds more solid, more appealing, more reliable to you?

A "stock" of something is a paper that says
"Thanks for entrusting this company with your heard-earned money. We'll try to make the best use of it, but ... well, you know how things can go wrong sometimes, so, if they do - don't blame us!"

A stack of something, on the other hand (depending on its height), is something that says:
"Sit down and rest on me. I'll be there for you when flying doo-doo meets the fan paddles. I will not go away."

There is no better way to make that point visual than the following chart:




Witness the huge up-and-down swings of the Gold Bugs Index (HUI) since 2003. (Unfortunately the time scale on the bottom gets messed up when trying to extend the time horizon on Stockcharts' set up). While establishing this giant sideways pattern, gold quietly and solidly kept moving up - and up - and up.

Fortunately, the latter fact helps to make one thing very clear: Once the HUI breaks out of its three-year consolidation pattern, it will make some serious fireworks! In that respect - and in that respect only - can one make an argument that stocks are "better" than bullion.

But, at rock-bottom, gold stocks have really only one advantage over gold: Depending on the phase of the investment cycle you happen to be in, this advantage can be huge - or it can actually be a negative.
That advantage is - familiarity.

Currently, this advantage is huge. A stock is a stock. Non-PM investors may be unfamiliar with the concept of investing in something that moves with the price of gold - but they are very familiar with how to buy, hold, and sell stocks.

A stock is a stock, and any broker can buy one for you ...
Read the entire article at FinancialSense.com : http://www.financialsense.com/editorials/wallenwein/2005/1009.html

El Paso Says Some Shut-in Gulf Output Lost Until 1Q2006

Breaking News from NGI's Daily Gas Price Index
posted Oct 11, 4:51 PM

El Paso Corp. said about 80 MMcfe/d of its Gulf of Mexico production shut in during Hurricanes Katrina and Rita will not come back online until the first quarter of 2006. Net production offshore totaled 205 MMcfe/d prior to Katrina and 170 MMcfe/d before Rita. ( more )
http://intelligencepress.com/subscribers/daily/news/story.emb?REF=40715


AccuWeather.com Warns Northeast to Be Colder, Snowier This Winter
Breaking News from NGI's Daily Gas Price Index
posted Oct 11, 2:04 PM

The Northeastern United States this winter is in for colder-than-normal temperatures, while west of the Continental Divide is expected to see milder-than-normal conditions, according to the Winter Forecast released by AccuWeather.com's Long Range Forecast Team, led by Chief Meteorologist Joe Bastardi. ( more )
http://intelligencepress.com/subscribers/daily/news/story.emb?REF=40706

China's Economy Continues to Boom

October 11, 2005 12:38 PM ET

SHANGHAI, China (AP) - China's economy continues to grow at a blistering rate, but the nation is facing mounting pressure from the United States to slow its soaring trade surplus by letting market forces set the value of its currency.

China's planning agency reported Tuesday that gross domestic product grew by 9.4 percent in the first nine months of the year, and is forecast to grow by 9.2 percent for the full year -- almost three times the growth seen in the U.S. and almost six times what is expected in Europe.

China's economy grew 9.5 percent in the first half of this year and expanded by more than 9 percent in 2003 and 2004. China will release official third quarter GDP figures later this month.

Many government and business leaders in the U.S. contend that China's boom is being fueled by an artificially low exchange rate for its currency, the yuan. U.S. manufacturers say the yuan is now undervalued by as much as 40 percent, making Chinese goods cheaper in the United States and American products more expensive in China.

U.S. Treasury Secretary John Snow on Tuesday urged China to adopt a more flexible, market-driven currency, rather than the state-set exchange-rate system currently employed.

In July, China halted its decade-long practice of pegging the yuan's value to the U.S. dollar, choosing instead to let the yuan trade in a narrow band against a basket of currencies of its major trading partners. At the same time, China raised the value of the yuan by 2.1 percent against the dollar. But since then, the yuan has gained only about 0.3 percent against the dollar.

"We are anxious to see the Chinese fulfill the commitment they made to allow market forces to play a larger role in setting their currency's value over time," Snow said during a press conference at the U.S. Embassy in Tokyo. "They've gotten on the path that allows them to do so and we'd like to see China continue on that path."

Snow wrapped up a visit to Japan Tuesday before heading on to Shanghai. President Bush's administration is fielding its top economic team for Oct. 16-17 meetings in Beijing of the U.S.-China Joint Economic Commission, which serves as a regular forum for officials from both nations to discuss economic issues.

The trip comes amid ballooning American trade deficits and increased trade tensions with China and Japan, the two main Asian export powers.

Chinese officials said the currency issue would be discussed during a visit to Beijing this week by Snow and Federal Reserve Chairman Alan Greenspan -- but they gave no sign Beijing would move faster in loosening its controls on the yuan.

Foreign Ministry spokesman Kong Quan urged the U.S. side to "heed fully the Chinese position on exchange-rate reform."

Strong increases in exports remain a key driver of China's growth, said the report published in the state-run newspaper China Securities Journal on Tuesday.

It noted that growth in exports was likely to top 30 percent from last year in the first nine months of the year, with growth for the year predicted at about 25 percent. Imports will rise by a more modest 18 percent, leaving a record total trade surplus for the year of $79 billion, the report forecast.

The U.S. trade deficit with China reached $162 billion last year, an all-time high with any country.

The U.S. Congress has reacted to the trade gap with calls for more forceful action. One measure with widespread support would impose 27.5 percent tariffs on all Chinese imports unless Beijing allows its currency to rise further in value against the dollar.

Sen. Charles Schumer, D-N.Y., said if China does not begin letting the yuan rise in value, the bill's co-sponsors will demand a vote before Congress adjourns next month.

"The Chinese and the administration should be under no misapprehension," Schumer told The Associated Press on Monday. "If there is no movement, we will push our legislation."

Fed saw more rate hikes

WASHINGTON (Reuters) - U.S. Federal Reserve policy-makers believed more interest-rate increases would be needed to keep inflation tamped down when they nudged credit costs up three weeks ago, according to minutes of the meeting released on Tuesday.

"Even after today's action, the federal funds rate would likely be below the level that would be necessary to contain inflationary pressures, and further rate increases probably would be required," the minutes said.

Read the entire article at: MoneyCentral: http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=OBR&Date=20051011&ID=5182182

Oil Prices Rise More Than $1 a Barrel

Tuesday October 11, 1:08 pm ET
By Brad Foss, AP Business Writer
Oil Prices Rise More Than $1 a Barrel As IEA Forecasts Drop in Energy Demand Will Moderate


WASHINGTON (AP) -- Crude oil prices rose more than $1 a barrel Tuesday after the International Energy Agency forecast that last month's drop in energy demand would moderate and some weather watchers predicted a colder-than-normal winter in the northeastern United States.

Energy futures also moved higher on persistent concerns about the pace at which oil and natural gas production -- and oil refining -- have recovered along the Gulf Coast in the aftermath of hurricanes Katrina and Rita.

Light sweet crude for November delivery climbed $1.05 to $62.85 a barrel on the New York Mercantile Exchange, where unleaded gasoline futures rose less than a penny to $1.81 per gallon.

On the International Petroleum Exchange, Brent crude futures rose 69 cents to $59.47 per barrel.

In its latest monthly report, the IEA blamed the September dropoff in motor fuel consumption on retail price spikes and sporadic supply shortages that followed Katrina and Rita. But the energy watchdog for industrialized nations said "October should be less affected as logistical disruptions subside."

The IEA report mirrored the thinking of some Wall Street analysts who have raised questions about recent Energy Department data showing a 2.6 percent decline in gasoline demand over the past month. "We believe the recent demand pullback is mostly a short-run response to a price spike, not a long-run shift in consumption patterns," Merill Lynch commodity analyst Francisco Blanch said in a report.

Energy futures prices have fallen from the highs reached immediately after the hurricanes, but there are still considerable bottlenecks in the Gulf Coast's output of oil, natural gas and gasoline. Eleven refineries accounting for roughly 3 million barrels per day of gasoline, heating oil and jet fuel production remain shut. And, as of Friday, 78 percent of daily oil production and 64 percent of daily natural-gas production in the Gulf of Mexico was down.

Cambridge Energy Research Associates said Tuesday that U.S. natural gas prices, which are already about double year-ago levels, will need to rise further in order to attract imports of liquefied natural gas. At the moment, the country's LNG import terminals are only operating at 50 percent of capacity, CERA analyst Bob Ineson said.

Adding to Tuesday's buying were concerns about higher-than-normal demand for home-heating fuels. Accuweather.com said in its 2005-2006 winter forecast that "colder-than-normal temperatures" were expected over the northeastern U.S., which consumes most of the country's winter heating fuel.

Nymex heating oil futures rose 2.02 cents to $1.992 a gallon, while natural gas futures jumped 38.5 cents to $13.36 per 1,000 cubic feet.

Energy prices rose throughout 2004 and 2005 because of rising demand, geopolitical unrest and ...

Read the entire article at Yahoo Finance: http://biz.yahoo.com/ap/051011/oil_prices.html?.v=10

Venezuela Moves Reserves to Europe

Chavez: Venezuela Moves Reserves to Europe
September 30, 2005 01:50 PM ET

CARACAS, Venezuela (AP) - Venezuela has moved its central bank foreign reserves out of U.S. banks, liquidated its investments in U.S. Treasury securities and placed the funds in Europe, Venezuelan President Hugo Chavez said Friday.

"We've had to move the international reserves from U.S. banks because of the threats," from the U.S., Chavez said during televised remarks from a South American summit in Brazil.

"The reserves we had (invested) in U.S. Treasury bonds, we've sold them and we moved them to Europe and other countries," he said.

Chavez, a sharp critic of what he calls "imperialist" U.S.-style capitalism, has often criticized foreign banks for the power they wield in international financial markets at the expense of poorer countries.

Chavez again proposed the creation of a South American central bank that would hold the foreign exchange reserves of all the central banks in the region.

"I'm ready right now with the Venezuelan central bank ... to move $5 billion (euro4.15 billion) (of Venezuelan reserves), to a South American bank," Chavez said.

Central bank officials could not be immediately reached for more details.

Read the entire Article at Money Central: http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=AP&Date=20050930&ID=5157487