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Denbury Resources Inc. Message Board

  • pddane_01929 pddane_01929 Jun 30, 2008 7:58 AM Flag

    Monday AM numbers

    Hare, Make Peace Now, et al,

    "He sees the Chinese currency appreciating "5 times" its current value against the dollar" and Make Peace Now's post on Gold seem to me to be the operative ideas at this stage. First some overall numbers as the new week begins:

    65 population weighted CDDs last week, 5 greater than normal and same as last year which will give us a nice S/D comparison week for natural gas. Robry is incomplete for the week but currently sitting at 84 which would be bullish. The BDI is up about a percent or so to 9599. Commodities are also largely in the green while world stock markets are off, as a general proposition. There are naysayers:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aP3UCawLQPS4&refer=home

    My sense is that we're exactly where we have been: bets with or on the exclusively the US economy and the US consumer will continue to fail in the near distant future and bets on internationally valuable hard assets for the same time horizon will continue to be reasonable ideas but are subject to the volatility that we have all come to know.

    Regards,

    Peter

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    • Peter, Moose- articles in WSJ today focus on China. Front page deals with China's "export machine" being threatened by the yuan's appreciation and other factors as well, labor laws adding costs. Half of the residents of Honghe, 50,000 people, made sweaters for export. Article supports Moose' assertion that China has the export infrastructure, which has been beneficial to their success. The US doesn't. The profit margins for the sweaters are now 30 cents vs. $2 in the past. Interesting final comment that they need to sell more sweaters in China, but you sense that is the problem, the domestic consumer market has not been a focus.

      Another article asks "how fast will the yuan appreciate". It is already up 30% in past three years. And another, editorial, "there is no 'The Economy' that focuses on differences in the US economy, what you are referring to, the export/global sectors are expanding while the consumer areas are challenged. He says, "what used to be "the economy" is now just one part of the global chess board, and the data we have can be misleading, incomplete, and simultaneously right and wrong". My favorite quote from the article attributed to Joe Biden, " we are all entitled to our own opinions, not to our own facts". We seem to obsess about things like the Fed funds rate when key global issues will govern our domestic future. And in the meantime, energy prices keep going up. If the yuan continues to appreciate, coupled with price controls, demand may not be affected. Not facts, just my opinion. Cheers.

      • 1 Reply to harehau
      • Hare,

        If the BRIC and other countries try to reign in inflation, which they very well may be forced to do, the possible appreciation of their currencies against the dollar could be potent. That would really change the world economic situation and perhaps not for the better. Instinct tells us that we're in for a lot of change over the next several years and that aspects of it will be likable or unlikeable depending on how we accept the change.

        On a lighter note, my wife and I had much fun over the weekend including a very pleasant dinner with a visiting oilman we haven't seen in a few years and a successful outing at the modern auction. We got a really interesting bit of late sixties-early seventies political art.

        Regards,

        Peter

 
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