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Gold Will Continue to Shine Amid Market Uncertainty

The U.S. consumer price index rose 0.5% in February from the month before, pushed higher by food and energy costs. The price index for all items climbed 2.1% over the past year.

But many think government-reported inflation numbers don't present an accurate price picture. Some economists estimate the true rate of inflation is closer to 8% or 9%. And those numbers could rise higher as the U.S. Federal Reserve continues to pump billions of dollars into the financial system.

Inflation, coupled with political turmoil in the Middle East, has pushed many investors out of stocks and into commodities. Gold rose to a record $1,445.70 an ounce on March 7. Market uncertainty from the Japan disaster pushed the metal down to $1,380.70 on March 15, but it gained again this week to hover around $1,400 an ounce.

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Mideast Crisis and Higher Oil Prices Could Pour Profit into Venezuela's Economy

Libya turmoil continued this week as Col. Moammar Gadhafi's troops tried to chase rebel forces out of cities housing key oil facilities. The pro-government regime wants to regain cities with oil operations, many of which rebels took over in the first days of fighting.

Attacks Wednesday also destroyed one oil facility's diesel oil storage tank and pipeline. Shukri Ghanem, Libya's de facto oil minister and the chairman of Libya's National Oil Corp., said no major oil installations were damaged in the explosion, but the fighting has disrupted a number of oil and natural gas facilities around the country.

Libya's oil exports have fallen to 500 million barrels a day from 1.6 billion since the country's conflict erupted, according to Ghanem. Libya hopes to resume fulfilling its oil contracts as soon as the political crisis subsides.

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Mideast Crisis Turns Attention to Saudi Arabia Oil Supply

Libya's political turmoil yesterday (Thursday) continued to rage near the country's important oil patch cities, as Col. Moammar Gadhafi's military fought to secure ports and refineries.

Libya's government tried to portray a sense of security to foreign reporters who toured the Zawiya Oil Refinery Co. yesterday, even as rebel forces remained in place throughout the surrounding city.

Rebels also infiltrated Brega, an oil port in eastern Libya, as government warplanes struck the site, according to the Associated Press.

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$100 Oil Sparks Energy Investment Interest

Civil unrest in the Middle East continues to push oil prices higher as companies with Libyan operations shut down production, threatening oil exports to Europe.

Crude oil futures on Wednesday hit the $100 a barrel level on the New York Mercantile Exchange (NYMEX) for the first time since September 2008. The April contract was as high as $100.91 in pre-market trading yesterday (Thursday).

Prices are even higher in Europe as its market is much more sensitive to Libyan oil export disruption. April Brent crude futures contract rose $2.45, or 2.2%, to $113.75 a barrel yesterday and hit an intraday high of $119.79, the highest level since mid-2008.

Volatility and uncertainty are driving both prices up, according to Money Morning Contributing Editor Dr. Kent Moors, a noted energy expert and editor of the Oil and Energy Investor.

"The Brent is far more sensitive to what's occurring in the Middle East than the [West Texas Intermediate] WTI in New York," Moors said in a FoxBusiness interview Wednesday. "The Brent also is more widely traded internationally than WTI is. So the end result is whenever you get an uncertainty situation like the one we currently have, Brent is going to be spiking further."

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Don't Use History To Predict Fate of Municipal Bond Market

Wall Street analyst Meredith Whitney triggered panic in many municipal bond holders when she declared last year that municipal bond defaults – possibly 50 to 100 – were on the horizon, due to the debt-laden condition of state and local government budgets.

Although some financial analysts have criticized Whitney for muni-bond warnings they say are overblown, she's not the only one predicting municipal bond market trouble. JPMorgan Chase & Co (NYSE: JPM) Chief Executive Officer Jamie Dimon said last month he expected more defaults this year, and Money Morning Contributing Editor Shah Gilani said Whitney is not crying wolf, as others have claimed.

"Make no mistake: The so-called ‘deadbeat states' problem is real, and muni-bond defaults are almost certainly unavoidable," said Gilani.

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Eurozone Debt Crisis, U.S. Economic Policy Not Likely to Cause Currency Collapse

The Eurozone debt crisis and U.S. economic policy continue to draw speculation over how these countries will overcome growing mountains of debt – and how the incessant borrowing will affect the euro and U.S. dollar.

More bad news came from Europe yesterday (Thursday) when the European Central Bank (ECB) had to intervene in Eurozone bond markets to buy Portugese debt. The country's 10-year bond yields hit a new euro-era record of more than 7.6%.

Portugal has already instituted pay cuts and tax hikes to pay down its debt, but recessionary concerns are casting doubt over Portugal's economic recovery. The Eurozone government's inability to agree on rescue tactics for its weaker governments is also making investors lose faith in the euro.

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Gridlock No Threat to Profitable Growth of China's Auto Market

China's auto market last year continued the sales surge that helped it oust the U.S. auto market from its top spot in 2009.

Sales of passenger cars, buses and trucks in China rose 46% in 2009 to 13.6 million, beating out U.S. vehicle sales of 10.4 million. The growth pace of China's auto market was the fastest in more than 10 years, according to the China Association of Automobile Manufacturers, and continued to soar in the first six months of 2010 – jumping 30.45% in that time.

While booming auto sales contributed to growth opportunities for automakers like General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F), analysts worried that the drastic increase in vehicles would contribute too much to painful traffic gridlock and wear and tear to aging Chinese infrastructure. The influx of cars on roadways even led Beijing to announce at the end of last year that it would allow just 240,000 vehicles to be registered in 2011, a little more than 33% of the number of new vehicles registered in 2010. The impending limits sparked a buying spree in December, with 30,000 new vehicles registered in one week alone.

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U.S. Clean Energy Investment Puts Upward Pressure on Rising Food Prices

In U.S. President Barack Obama's State of the Union address Tuesday, he highlighted clean energy investment as a key component of America's future, one that will be reflected in his budget proposal for fiscal 2012.

"With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015," the president said in his speech to members of Congress. "[I]nstead of subsidizing yesterday's energy, let's invest in tomorrow's."

This commitment to clean energy investment increases the importance of biofuels like ethanol, made from corn and other agricultural products. About 40% of U.S. corn is used to make ethanol, and increased ethanol production leads to higher corn and food prices.

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Canadian Stock Market Attractive Escape From Falling U.S. Dollar

Investors are warming up to the U.S. stock market in the New Year, eager to get in on gains they missed while cautiously sitting out 2010. But anxiety hasn't totally evaporated, as fears over the declining U.S. dollar raise questions about the safety of U.S. equities.

The U.S. Federal Reserve likely will maintain interest rates near zero and continue its quantitative easing policy, contributing to the greenback's weakness.

"I fully expect the dollar to continue to disintegrate in 2011,"said Money Morning Chief Investment Strategist Keith Fitz-Gerald.

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Bixby Energy Systems Catches China's Eye With Coal Processing Technology

As energy policies become more of a global financial and environmental concern, a clean energy company that can successfully develop "green" technologies will be at the forefront of the next energy industry investment wave.

A comment sent in from a Money Morning reader recently addressed a new coal processing technology developed by a U.S. company to make headlines this year.

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