It’s Good to Know: Financial Times interview with Jim Rogers

Browsing, browsing, browsing I have found on FT.com a very interesting interview to Jim Rogers, George Soros’ Quantum Fund founder.

Comodities, water recycling in China, hyperinflation on the making, the dawn of the dollar… I hope you enjoy it as much as I did, I am pretty sure that the 20′ are worth your while:

From South Korea…

.calvin

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On what happens to a Central Bank’s balance sheet when a client bank goes bursts

Dear Hobbes,

The other day I was discussing the current financial turmoil with a friend and we got to a dead end we couldn’t find an answer to. I have been trying to research the issue but I haven’t been able to get a clear response.

Central Banks around the world are pumping liquidity (creating money backed by… apparently nothing) into the banking system and financial markets.

In theory, they lend the money to banks in need of funds, but they are still reluctant to lend to the average person, or even other banks. Continue reading

On the rise of the cost of living and the ones who really carry the can

Going back to how to spend it you have plenty [On billionaires spoiling artists and the hard life of the super-rich, May 26], from 2000 to 2007 the super-rich (dwellers of the 95th percentile of the income distribution) saw their real wages increase about 9% compared to an average 3% for the rest of mortals.

This field starts to fascinate me. The rich are getting richer so much faster than the rest of us that luxury goods inflation, you know, the difference in price between year 1 and 2 for those Sikorsky helicopters, Hermès goodies, gold Patek Phillipe watches and, well, other millionaire stuff (I guess I emphasised my social position as a non-well-off), is way higher than the average CPI, IPC, RPI or whatever your own government wants to call it and make out. Continue reading

On the future doom and gloom of the oil snatchers, we haven’t seen anything yet

Hobbes, the crude oil spot price for a Brent barrel of crude closed last Friday (last Monday was bank holiday in the UK) at $132.73. And yesterday London got gridlocked courtesy of hundreds of lorry (truck) drivers. Toyota would make a fortune out of a successful hybrid truck. So far FedEx has the largest fleet of hybrids in the world with a “massive” 95 vehicles at present. I make it that traditional British hauliers are not interested in paying the premium price.

Pundits have started talking about oil as the new bubble in financial markets. The Daily Telegraph reports that even George Soros thinks that:

Speculators are largely responsible for driving crude prices to their peaks in recent weeks and the record oil price now looks like a bubble […].

Well, coming from the king of speculators, we will be very careful to panic as of yet. Especially when he expects oil prices to collapse when the US and UK fall into recession.

Continue reading

On oil price at $200 and business as usual

The guys at Goldman Sachs have done it again. They raised the benchmark for the oil barrel to $200. GS’s boys believe that due to inadequate supply growth oil prices are increasingly likely to hit between $150 and $200 a barrel over the next six to 24 months.

Last year the markets thought they were crrrrazy when forecasting $100 a barrel. And now we are playing around $122.

Crazy Hillary and McCain’s gas tax holidays aside, the slowing of the US machine is not enough to balance the raising oil needs of energy inefficient and hungry China and India. Continue reading

On food price rises and Malthusian catastrophism

Exorbitant food prices seem to be the song these days. After wheat’s race to heaven, the price of rice more than doubled since January –up 50 per cent in two weeks- and producing countries are cutting down or even banning exports to ensure local consumption. The sharp increase -Thai medium-quality rice, a global benchmark, traded at about $850 a tonne on Friday- came as leading exporting countries, including Vietnam, India, China and Egypt, banned completely foreign sales.

However, some countries seem to be taking advantage of the situation to improve the Government’s fiscal balance. Apparently, this is what is currently happening in Argentina, where Government raised a tax on exports of soya to between 43 and 49 per cent, up from 35 per cent, and placed new duties on other farm Continue reading

On supermarket tricks and greedy, careless grownups

Funny enough, before my cheespedition to hunt some wild cheese, I happened to have read an -as usual- interesting article by Tim Harford on his March 15 Dear Economist column on the Weekend supplement of the FT: Sweet Justice. An enjoyable short read that let me apply some field work to my cheese obsession.

While I was absentmindedly making mental calculations on raises in the price of Edam cheese, I realised that the Tesco Medium Cheddar (500gr) was marked at £2.76 (£5.52/kg). Interestingly enough, Tesco Medium Cheddar (1kg) was priced at £5.78. Continue reading