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Sunday, June 29, 2008

Gold price exponential rise post 9/11....get it before it's too late



Well, folks....one only has to look at the Gold Price (U.S.$ / ounce) post - 9/11 to arrive at certain conclusions.

Image source of graph is kitco.com :




My take :

The price covers a time range from 1975 - 2008 ...i.e. 33 years . I see a humongous peak round 'bout 80....time span is relatively moderate.

But check out how gold price is climbing steadily post- 9/11 !
In fact, the spike started from 1978....about the time when there was the OPEC First Oil Crisis, I guess......

But, remember, that was a relatively peaceful time....

The climb post December 2001....goes on and on and on....

PLUS......THIS IS IN DIRECT CORRELATION WITH THE ESCALATING GLOBAL TENSIONS.

But, then...the IMPORTANT QUESTION IS : how far has it climbed - % wise ?

If you look at the %wise climb ......I believe, one can STILL BUY GOLD.....

Wait till 5 years till the world is a bit calmer.....& SELL.....

Monday, June 23, 2008

Escalating Conflicts that will drive up Oil Prices

Besides Iraq, Iran & Afghanistan...there are some other conflicts/situations that will drive up oil prices:

  • Escalating Nigeria conflict between Northern & Southern parts.
  • Iran Pipeline thru' Afghanistan to India & beyond in jeopardy as the entire stretch is conflict-bound.
  • Yemen Islamic fundamentalists & Qaeda elements infiltrating Saudi Arabia.
  • Russian oil pipelines under threat from Chechen militants.
  • Turkish infiltration into oil-rich Kurdistan
  • Central Asian countries' destabilization due to Turkish ambitions and over-ambitious oil companies.
  • Kuwait oilfields under the shadow of the Shia Crescent rising in power.
  • Same applies for the smaller countries of the Mid-East

Saturday, June 21, 2008

Global Conflicts cause Rising Oil Prices that Trigger Inflation Hike



Global conflicts ...some new fronts might open up : such is the worry in the market.

A few such are : A massive Israeli military exercise and some remarks that point to a possibility of a confrontation with Iran. This is speculation...but if it happens it will have massive impact on oil prices.....MASSIVE. reason is 40% of the world's oil passes through the narrow Gulf of Hormuz off Iran. This is an extremely strategic area.

A conflict in Iran might mean shutdown of oil from Iran as well as Iraq as all the oil has to pass through this.

Recent attacks in oil-rich Nigeria......these are hit and run operations from speedboats.

The ongoing Iraq & Mid East Crisis. Pipelines are easy targets and there is no cheaper alternative to it.

Oil Prices are hence on the boil.

Leading to massive global inflation.

Thursday, June 12, 2008

My crude oil price predictions coming true


Do see my earlier posts when I predicted crude oil CAN EVEN TOUCH $200 / BARREL by 2008 end !

People were skeptical...I guess they are not now. Oil's touching $ 140 / barrel . It was $ 65 / barrel last June.

Check out Graph source is from www.wtrg.com ....






So.....what does it imply ?


Massive inflation rate globally.

Countries that are not able to manage macro-economic factors, falling into debts.....will have to repay it sometime....and in

the process suffer severe losses.

I would bet the European Union would DO STRONGLY ON A LONG-TERM BASIS.

If you are a global investor, buy blue-chip European Stocks.
Developing countries' blue chip stocks buy after serious research.


Wasn't Nostradamus a poor feller like me ? Heck, who cares ?

Monday, June 9, 2008

Predictions come true again - Indian Stocks nosediving


Check out my last post....when I said the Indian stocks are way over-inflated.

Well, as I write....the Sensex (Indian equivalent of the Dow Jones) has nosedived below 15,000. Check out the graph I gave last post...... It's elementary to note from such a sharp steep peak.

Well, here's the quantitative analysis :

  • Crude oil prices sky rocketting, now it'll breach $140 / barrel
  • US subprime lending problem
  • Global credit crunch
  • Inside India...rising inflation rates
  • Slowdown in domestic industrial production numbers
  • Middle East Crisis may deepen with Iran flexing up its ante
  • High inflation rates, ACTUALLY double digit (real rate, that is....it doesn't take a genious to figure out it's double digit already if one goes to the market)
  • slowdown in GDP has been reported
  • corporate earnings have fallen in many key sector year-to-year basis
  • Foreign investors are fleeing the market. Problem with most Indians is that they have very little confidence in their own stock markets.....whenever they see FIIs fleeing, they start dumping their own stuff. This is a crying shame.
  • Another big factor is - Indian Prime Minister Dr. Manmohan Singh 's hands are tied. He saved India from ruins way back. But now, political compulsions have forced him NOT TO TAKE BOLD STEPS........this may be the SINGLE MOST IMPORTANT FACTOR TO THE INDIAN STOCK MARKET TAKING EVEN MORE HEAVY BLOWS.

But I think the good news is:

The lowest level the SENSEX will go down is to 12,000. I've come to this figure inputting all the factors cumulatively. This is THE REALISTIC FIGURE.

In fact, even now, one can buy into some blue chip stocks.

As also steel, I.T. (those which depend heavily on offshore projects), pharma, banks, cement.

Friday, June 6, 2008

U.S. Stocks (DJIA) versus Indian Stocks(Sensex) .....graph analysis





I'm comparing this graph (Graph source: yahoo.com) Indian Stocks (Sensex) versus the U.S. Stocks (Dow Jones Industrial Average).

Red line = DJIA

Blue Line = Sensex

Note that the graph is a linear one, not logarithmic.

Well, I find something fishy over here.

Sure, the Indian economy IS GROWING at a fast paced, blistering rate. The U.S. economy is slowing down.

But is the DIFFERENCE so great ????

And this is a percentage % increase graph.......so that's why I think the Indian stocks are quite ..................
OVER-VALUED.

Note the extremely SHARP RISE OF THE GRAPH AFTER 2005 !

Just too steep a gradient. Beats me......

Tuesday, June 3, 2008

Rise of Russia .....within the next 10 years

Last posting...I predicted the Fall of the Chinese economy. I hurt a few of my friends who happened to be socialists in this part of India....waaaah, waaaah...so sorrrrry.

And, this is for Alana del Valle Israel, who I thought was from Israel, but who turned out to be from Phillipines, actually in the U.S., but dating an Indian. Globalization 101 (practical lab) for me.

But you see, my dear readers, I only write from an OBJECTIVE, NEUTRAL point of view.

So, here's my prediction as to WHY Russia will rise again. Quantitatively, here are the points :

  • Russian Military & Defense Strategies. They are one of the best in the world, IMHO. Historically, Russians have proven to be masters at this. Flashback the Great Russian Retreat from the forces of Napolean and the unthinkable crushing of Napoleon's mighty forces. This was the beginning of Napoleon's downfall. Cut back also to World War 2. Russian Retreat straight back uptil Stalingrad. The Battle of Stalingrad. The Germans never recovered from this. This was the beginning of Hitler's downfall.
  • Russians still have the largest number of nuclear warheads, I believe. 17,000...as against 10,000+ of the U.S. Though the accuracy of these nukes are bad.
  • AK47 (Atomotav Kalashnikova) was designed by Mikhail Kalashnikov while he was in a hospital bed. I blame it on the nurses, I tell ya...had they paid proper attention, this mischievous, most innocent looking genious wouldn't have gone about making such stuff. The design was so flawless that it has stood the test of time. 60+ years.......think 'bout it. So, They posess one of the best brainpower. Their mathematical ability is acknowledged as one of the best. Apply that brainpower to warfare and you have a deadly cocktail.
  • ECONOMY. Russia has had enough flow of capital into its system. It has huge reserves of basic stuff, like oil, ores, etc.
  • Oil. Russian has struck extremely clever strategic partnerships with Venezuela and other countries, and has not angered the Middle East OPEC countries. It can later utilize this.
  • Politically, I really don't want to comment much.....but at least compared to China, there was no vast disparity between the urban rich and the rural poor during the time of the Soviets.
  • Middle tier and small businessmen could flourish in Russia.....if this is allowed, economic backbone will remain strong.

Russia does have quite a lot of negatives like suppression of civil liberties and stuff like that, which I stronly disagree with. But then, this is just an objective analysis.


...........To Russia with love
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