Anyone who has read my blog for some time, knows that I am bullish on oil over the next 12-24 months. I recommended purchasing oil in the 50s and low 60s . I still like it over that period, but think it ran up a bit too fast. Rex Tillerson, CEO of Exxon said on 6/16/09 The recent rise in oil prices is mainly caused by the weak dollar and not supported by market fundamentals. “When you look at just fundamentals, there’s not a lot to support this kind of price movement we have seen…in the last six weeks…Concerns about a weakening dollar and coming inflation have led some investors to bet on an economic recovery and try to get ahead of a rally.”
Source: Rex Tillerson, Exxon CEO statements made at a gas conference the Dutch city of Groningen.
“About the time we think we can make ends meet, somebody moves the ends”
My Comments: Merkel has been critical of central bank actions for some time. The independence of the Federal Reserve specifically is very suspect to me. Merkel was on the record saying “I view with great skepticism what authority the Fed has and the leeway the Bank of England has created for itself,” Merkel said in a speech in Berlin. “We have to return jointly to more independent central bank policies.” Stricter monetary policy isn’t politically acceptable, even when it’s the right thing to do. Merkel has called for tighter monetary policy (from foreign and the German central bank). Merkel apparently was awake on the day they taught about German’s inflation problems of the past.
Take a look at these two pretty good articles by Bloomberg and old faithful the Wall Street Journal.
My Comments: Interesting quick read. MSFT isn’t the only company analyzing their tax status. I know it sounds good to “close tax loops” and many should, but sometimes it just doesn’t make sense. Honestly, at times I don’t no where the line is either.
“Microsoft Corp. Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.
My Comments: In Germany you can now buy gold out of vending machines in the subway. Gold is a funny asset that many people believe is the only real hedge against inflation. The problem is you will always need willing buyers and sellers and during panics it usually goes up and during periods of normalcy everyone forgets about it. It is the wrong asset to buy and hold for decades, but can provide some diversification benefits during periods of uncertainty.