First, I don't claim to be a financial analyst. I am an engineer, an astronomy buff, a history buff and a Treo-680 power user!
I will qualify that everything I have said and will say is my humble opinion, derived from personal research based on a deep interest in what is going on in the world. My own retirement accounts are at stake and I find that to be a great motivator. Responses to your observations below: 1. Yes, I greatly simplified the details of what determines the value of the US dollar in the international financial markets. I greatly simplified a LOT of detail in my post. It was a judgment call on my part in my effort to take something rather complicated and boil it down enough for people to be able to quickly grasp what I was trying to say and then allow them to go out and read the news stories for themselves and come to their own conclusions. My goal was not to try to get people to see things "my" way, but rather to help them become aware of a larger picture. 2. Yes, there is a large foreign investment component in US banks involved. However they alone can't keep the banks solvent and I believe that since that investment is fairly stable, that at this time, they are not a primary influencing factor in the relationship between the mortgage crisis and how it effects the price of fuel and how that is effecting the cost of transportation of all goods. If they were to start a run on those US banks, that would probably crater them in a flash but they are not going to do that for selfish reasons. That might change in the future but I very much doubt it. 3. I have seen the dollar steadily eroded against the Euro and the Pound over the past two years and the gradual slide is continuing. However those aren't the core currency relationships involved here. OPEC nations and the oil markets don't trade based on European currencies. A detail breakdown of the trade deficit, as always, is an important factor here too. 4. More refineries would be good but that wouldn't be near enough. We need to come up with a system of great tax incentives to promote new research in alternative energy as well as tax credits for meaningful residential, commercial and industrial "green" efforts. It is much better to save a watt than to needlessly throw one away and have to make more. We also need to open ANWR, re-start off-shore drilling, re-enable growth in nuclear energy (along with better safety and disposal technologies), start seriously developing "clean coal" technologies and better LED lighting technologies to replace both incandescent *as well* as fluorescent lighting. Not to mention an effective national effort to replace wasteful nighttime lighting that throws a lot of our generated electricity into the sky instead of onto the ground. This not only wastefully throws away precious generated energy, it also confuses many birds and insects and endangers their survivability in the process. Not to mention denying the vast majority of Americans the incredible experience of a majestic starry night sky and disconnecting them from their own history. 5. I would only suggest buying Palm shares if you were able to buy 51% of them and then replace all of the upper management and the board of directors! Clear skies and chocolate! "My advice is always free and worth every penny!" And I really mean that! -Christopher Erickson Network Design Engineer 5432 E. Northern Lights Blvd., Suite 529 Anchorage, AK 99508 N61° 11.710' W149° 46.723' Meade 16" LX200 SCT www.data-plumber.com "Monetary contributions to support the Data-Plumber.com archives are always welcome via PayPal to [EMAIL PROTECTED]" > -----Original Message----- > From: [email protected] [mailto:[EMAIL PROTECTED] On > Behalf Of L . . . > Sent: Saturday, July 12, 2008 5:07 AM > To: [email protected] > Subject: Re: [Treo] Fw: An open letter to all airline customers > > a couple of things > > 1. I thought the value of the dollar was no longer based on the gold > standard and instead was based on the strength of the GDP, > the outstanding money in the system and the amount of debt. > > 2. What about the role of foreign investment in propping up > the banks - like from China and Dubai? > > 3. I agree with you about the value of the dollar impacting > what we see as the price of oil, but it seems like our currency > has been relatively stable versus the Euro and Pound for the > past 2 years, yet both our oil prices as well as their oil > prices have been increasing as well. So doesn't that point > more to demand? Or does it mean that they are experiencing > similar economic problems? > > 4. What about the idea that we need more refineries more than > we need more oil? > > and finally > > 5. Is now a good time to buy PALM shares? :) > > On Fri, Jul 11, 2008 at 7:09 PM, Christopher Erickson < > [EMAIL PROTECTED]> wrote: > > > (Warning: long, informative post) > > > > Actually I thank the US banking industry for this one. > > > > Specifically, it was all started by Bank of America. (The same > > people that are currently giving credit cards to illegal aliens, > > but that's another story). > > > > The banks are the ones who gave out extreme risk home loans like > > candy bars to people who couldn't afford the payments and were > > gambling on house flipping to "kite" their debts forward and be > > able to stay solvent. > > > > It didn't help that there were countless TV shows, magazines and > > web sites that were warning people that they shouldn't miss out > > on the "incredibly profitable" house flipping craze. > > > > When the real estate market saturated and went flat, the flippers > > started going down in financial flames like mayflies around a > > campfire. > > > > This, of course, was inevitable and quite predictable. > > > > This in turn left the banks with a huge number of defaulted > > loans, deflated and unsellable real-estate that was often in a > > state of unlivable mid-reconstruction and a greatly diminished > > incoming loan repayment revenue. > > > > Somehow, the banks didn't see what was about to happen and got > > badly bit by the loan default Tsunami. Or maybe nobody wanted to > > be the first one to "blink" and maybe miss out on another year of > > wild but ultimately unsustainable loan profits. > > > > This left the US banking industry in a greatly weakened state and > > a number of big investment house names on Wall Street were > > suddenly on the brink of default. > > > > So then the feds started printing money with wild abandon to loan > > to the banks to keep them solvent and to avoid a cascade effect > > that would result in a complete "depression era" style US economy > > collapse. > > > > Their plan is that this will soften the impact of the banking > > crisis by spreading the "market value correction" across the > > entire US economy, which incidentally, is mostly sustained by > > middle-class Americans. People who's retirement funds are the > > majority financial instrument in the market. > > > > As an interesting point of trivia, the concept of a "retirement > > nest egg" mostly didn't exist before WWII. Back when extended > > families and a rural existence was more the norm and not the > > exception. The kids generally inherited the family farm and the > > grandparents migrated into less demanding family roles. > > > > Anyway this means a lot more paper money in circulation with > > less gold behind each dollar. > > > > This greatly depressed the value of the US dollar on the > > international financial market. > > > > International investors started switching their investments away > > from the US stock market and for the most part, to the next best > > thing, which was oil futures on the international commodities > > market. > > > > Note that a significant portion of those investors are once again > > middle class Americans and their retirement funds. > > > > The Chinese will buy oil at any price. Actually they "must", or > > the momentum of *their* economy will falter and cause a massive > > Chinese financial disaster. > > > > Combine the demand for international oil futures with the Chinese > > demand for oil at any cost with the weakened US dollar and we get > > the devastating US oil prices. > > > > All of the big oil companies are publicly traded corporations who > > are required by US law to make their best effort to legally > > maximize the investments of their investors. If they were to > > attempt to suppress their own profits from high gas prices, they > > would be promptly buried in investor class action suits and FTC > > investigations. > > > > *end of history lesson* > > > > --------- > > > > *start of speculations* > > > > Fuel prices are not going to go down. The Federal Reserve, with > > full support from both political parties, will continue flooding > > the market with printed money. > > > > US dollar will continue to slowly weaken on the international > > market. The Federal Reserve "experts" believe this approach is > > preferable to an uncontrolled roller coaster ride in the banking > > industry. Eventually it will stabilize and then begin to build > > again as the feds begin removing the excess paper money (and > > recovering the low interest federal loans to troubled banks) from > > the US money supply. > > > > Energy costs will continue to go up. An unavoidable consequence > > to doing a (hopefully) controlled deceleration of the US economy, > > giving it time to absorb the mortgage/banking crisis and > > eventually get back on an adjusted and stable growth track. > > > > Meanwhile, solar energy and other alternative energy markets will > > experience *explosive* growth. Eventually (measured in years) > > that will lead to market over-saturation and a "market meltdown", > > where most of the mid-sized energy companies will either be > > absorbed or go into default. > > > > There will also be an explosion of "snake oil" alternative energy > > salesmen, selling bogus hybrid car conversion kits and just about > > anything else that might be passed off as an "energy saving" or > > "energy generating" device. BEWARE. > > > > Hybrid, high-efficiency and all-electric cars are going to be all > > the rage for the next five years or so. Most will be so expensive > > that it will make more sense to keep driving your old gas guzzler > > and to supplement it with a bicycle, motorcycle or scooter. A > > good bicycle can be good for your health too. High efficiency > > cars that actually make financial sense are probably still seven or > > more years away. > > > > In the near term, OPEC might step in and implement price caps to > > keep the cost of a barrel of oil from going too high. This makes > > sense from an OPEC long-term financial perspective. They don't > > want the world to be weaning itself off of their addition to > > middle-east oil any time soon. > > > > If you have investments in the stock market, hopefully they are > > all in market index funds and not all in a small handful of > > companies. If not, then now might be a good time to convert your > > investments into reliable and safe market index funds, like the > > S&P 500. I would suggest taking the long view and take solace > > that the market will recover (it always does) and that your > > investments will ultimately come through unscathed. This "long > > view" might be four to ten years for a full recovery. > > > > People over 55 will be the hardest hit by this current market > > slump because they will need their retirement money much sooner > > than younger investors, who will be able to wade through this > > slump and in fact, can benefit from making good index fund > > investments now, while the market is undervalued. > > > > If you have any investments in any air-travel related companies, > > I would suggest moving them NOW to an S&P 500 index fund. > > > > There might be a rebirth of the use of railroads to move product > > and people. Trains are still one of the most energy-efficient > > methods of transportation in existence. > > > > I hope this helps or at least entertains! > > > > "My advice is always free and worth every penny!" > > > > -Christopher Erickson > > Network Design Engineer > > 5432 E. Northern Lights Blvd., Suite 529 > > Anchorage, AK 99508 > > N61° 11.710' W149° 46.723' > > www.data-plumber.com > > > > > > > > > -----Original Message----- > > > From: [email protected] [mailto:[EMAIL PROTECTED] On > > > Behalf Of Eugenio Perea > > > Sent: Friday, July 11, 2008 12:24 PM > > > To: [email protected] > > > Subject: Re: [Treo] Fw: An open letter to all airline customers > > > > > > > > > Responding to the original letter -that places the blame on > > > speculators- > > > here is a very interesting piece from the Economist, stating the > > > opposite case: > > > > http://www.economist.com/opinion/displaystory.cfm?story_id=11670357 > > > > > > Cheers, > > > > > > Eugenio > > > > > > L . . . wrote: > > > > maybe they can make hybrid planes :))) > > > > > > > > I heard that some airlines were grounding the 747s. I > > > suppose the 777 can make it across the pond. > > > > > > > > On Fri, Jul 11, 2008 at 1:50 PM, Scandals & Animals < > > > > [EMAIL PROTECTED]> wrote: > > > > > > > > > > > >> ...... Original Message ....... > > > >> On Fri, 11 Jul 2008 11:48:44 -0400 "Craig Froehle" > > > >> <[EMAIL PROTECTED]> wrote: > > > >> > > > >>> Perhaps the consumer airline industry doesn't deserve to > > > survive in > > > >>> its current state. Could it be that there is simply no > > > way to fly a > > > >>> person half-way across the globe for anything less than > > > several times what the typical consumer is willing to pay? > > > >>> > > > >> I hadn't realized this, but I heard that a 747 holds > > > 53,000 gallons of > > > >> fuel, and jet fuel is well over $7 a gallon now. I don't > > > know how many of > > > >> those gallons it takes to go from NY to LA, but that has > > > to cost an awful lot. > > > >> > > > >> I heard an airline exec interviewed, and he said soon, air > > > travel will be > > > >> only for the rich. The days of the common man flying > > > anywhere except under > > > >> unusual circumstances are gone unless the price of oil > > > plummets. Think of > > > >> what that does to the Hawaiian tourism industry. > > > > > > ------------------------------------ > > > > Yahoo! Groups Links > > > > > > > > > > > -- > Fred Allen - "Television is a medium because anything well > done is rare." > > > [Non-text portions of this message have been removed] > > > ------------------------------------ > > Yahoo! Groups Links > > >
