Thursday, July 27, 2006
Condoleeza Rice Goes Down in History
EUR/USD 1.2739 Hi 1.2753 Low 1.2706
USD/JPY 115.60 Hi 116.43 Low 115.54
EUR/JPY 147.29 Hi 148.07 Low 147.18
Well Condoleeza Rice has something to add to her C.V. now that she successfully blocked all calls for an immediate cease-fire in Lebanon. Her actions in Rome yesterday will go down in history. What a great way to be remembered. The spurious justification is you can’t have a cease-fire NOW, because the details haven’t been agreed. Well that certainly makes sense. Let’s have more killing and destruction in the meantime.
The outcome of the Rome meeting was hardly a surprise. When the U.S. announced its speed shipping of more missiles to Israel last week, the intentions of the U.S. Administration were obviously not PEACE. The Rome meeting was just a face-saving charade: a P.R. exercise for Western voters. The Israelis, who seem to understand P.R. a little less, have since announced that at the Rome meeting THE WORLD gave Israel permission to continue their attack on Lebanon. The Israelis didn’t stop there. The Israeli Justice Minister also announced that since the residents of Southern Lebanon have had sufficient time to leave their homes, anyone still in the area must be connected to Hezbollah. The implication here is that anyone still in Southern Lebanon (the old, the infirm, the stubborn, those with nowhere to go, the young, the slow, the disorganised, the resigned) is NOW a legitimate TARGET for the Israeli army. Israel is is expected to increase the intensity of its campaign. Southern Lebanon and its residents will be a new car park.
Not,of course, that the Israelis want any witnesses. In keeping with tradition, they have attacked U.S. Observers and media outlets and can be expected to attack any foreign journalists who may be in the area. Dead men can’t talk. The liet-motif of gangsters everywhere.
The trouble with gangsters, however, is that they can’t be trusted. An alliance of convenience today, may not be so convenient tomorrow and voilà suddenly you are the guy in the cement shoes. So far it seems the Israelis haven’t considered the possibility that the U.S. will one day cancel its blank cheque and leave them exposed in a region which, right now, is not exactly Israeli friendly. LINK Perhaps they should have a little chat with a guy in the cell in Baghdad: Saddam Hussein. Once a much-touted ally of the Anglo-American alliance and now a man awaiting execution while his country lies in ruins.
But no matter, the people who start wars rarely think about how they are going to end. They assume they will win. History suggests that that isn’t always the case. No matter how well armed you are.
What Condoleeza Rice did yesterday was to further undermine the standing of the U.S.A. in the eyes of the world. She, and the Bush Administration, assume that there will be no negative consequences: the rest of the world will continue to fund the U.S.A. and the U.S.A. will be able to continue imposing its terms in strategic alliances and trade. They could be in for a bit of a surprise. NOW increased political isolation can be added to shifting interest rate differentials, a huge external deficit and a Federal Government Deficit which is out of control, as a reason to sell the USD.
But back to mild old Ben Bernanke. Well he did his thing. Reassured everyone that the situation was under control. The economy is “moderating”, inflation is present but not a major risk, the FED is on the case and certainly won’t do anything rash. Translation: rate hikes are on hold. For now the Stock Market is going with the “rates are on hold” story and ignoring what “moderating” growth and higher OIL prices will do for company profits. That can’t last.
The FOREX Market didn't need any prodding. The USD bears ran with “the rates are on hold” story. And with Miyako Suda at the BoJ making noises about further rate hikes in Japan, the USD/JPY is leading the charge. The short term target for the USD/JPY is 112.00. The USD bear trend is only just starting to hot up. All we need is more missteps by Bush and Co., and given their record, that is only a matter of time.
OIL 74.35
GOLD 645.70
With no cease-fire in Lebanon, ugly rumours about Stage Two of the neo-con Middle East plan, and little incentive for people in the wider world to hold the USD, GOLD saw buying interest yesterday. More can be expected.
Similarly with Iran clearly in the cross-hairs of the U.S. neo-cons, OIL prices have only one way to go: UP. Iran, after all, is sitting on very large oil reserves. In the short term Iran could chose to stop oil exports altogether, should the U.S. turn up the heat. While an outright attack on Iran would do to OIL prices what the invasion of Iraq did: see them double.
Any slowing (sorry “moderation”) in U.S. economic activity will be too little, too late to have an impact on OIL prices. The short term target is USD 80, but USD 100 a barrel seems to be the consensus forecast.
USD/JPY 115.60 Hi 116.43 Low 115.54
EUR/JPY 147.29 Hi 148.07 Low 147.18
Well Condoleeza Rice has something to add to her C.V. now that she successfully blocked all calls for an immediate cease-fire in Lebanon. Her actions in Rome yesterday will go down in history. What a great way to be remembered. The spurious justification is you can’t have a cease-fire NOW, because the details haven’t been agreed. Well that certainly makes sense. Let’s have more killing and destruction in the meantime.
The outcome of the Rome meeting was hardly a surprise. When the U.S. announced its speed shipping of more missiles to Israel last week, the intentions of the U.S. Administration were obviously not PEACE. The Rome meeting was just a face-saving charade: a P.R. exercise for Western voters. The Israelis, who seem to understand P.R. a little less, have since announced that at the Rome meeting THE WORLD gave Israel permission to continue their attack on Lebanon. The Israelis didn’t stop there. The Israeli Justice Minister also announced that since the residents of Southern Lebanon have had sufficient time to leave their homes, anyone still in the area must be connected to Hezbollah. The implication here is that anyone still in Southern Lebanon (the old, the infirm, the stubborn, those with nowhere to go, the young, the slow, the disorganised, the resigned) is NOW a legitimate TARGET for the Israeli army. Israel is is expected to increase the intensity of its campaign. Southern Lebanon and its residents will be a new car park.
Not,of course, that the Israelis want any witnesses. In keeping with tradition, they have attacked U.S. Observers and media outlets and can be expected to attack any foreign journalists who may be in the area. Dead men can’t talk. The liet-motif of gangsters everywhere.
The trouble with gangsters, however, is that they can’t be trusted. An alliance of convenience today, may not be so convenient tomorrow and voilà suddenly you are the guy in the cement shoes. So far it seems the Israelis haven’t considered the possibility that the U.S. will one day cancel its blank cheque and leave them exposed in a region which, right now, is not exactly Israeli friendly. LINK Perhaps they should have a little chat with a guy in the cell in Baghdad: Saddam Hussein. Once a much-touted ally of the Anglo-American alliance and now a man awaiting execution while his country lies in ruins.
But no matter, the people who start wars rarely think about how they are going to end. They assume they will win. History suggests that that isn’t always the case. No matter how well armed you are.
What Condoleeza Rice did yesterday was to further undermine the standing of the U.S.A. in the eyes of the world. She, and the Bush Administration, assume that there will be no negative consequences: the rest of the world will continue to fund the U.S.A. and the U.S.A. will be able to continue imposing its terms in strategic alliances and trade. They could be in for a bit of a surprise. NOW increased political isolation can be added to shifting interest rate differentials, a huge external deficit and a Federal Government Deficit which is out of control, as a reason to sell the USD.
But back to mild old Ben Bernanke. Well he did his thing. Reassured everyone that the situation was under control. The economy is “moderating”, inflation is present but not a major risk, the FED is on the case and certainly won’t do anything rash. Translation: rate hikes are on hold. For now the Stock Market is going with the “rates are on hold” story and ignoring what “moderating” growth and higher OIL prices will do for company profits. That can’t last.
The FOREX Market didn't need any prodding. The USD bears ran with “the rates are on hold” story. And with Miyako Suda at the BoJ making noises about further rate hikes in Japan, the USD/JPY is leading the charge. The short term target for the USD/JPY is 112.00. The USD bear trend is only just starting to hot up. All we need is more missteps by Bush and Co., and given their record, that is only a matter of time.
OIL 74.35
GOLD 645.70
With no cease-fire in Lebanon, ugly rumours about Stage Two of the neo-con Middle East plan, and little incentive for people in the wider world to hold the USD, GOLD saw buying interest yesterday. More can be expected.
Similarly with Iran clearly in the cross-hairs of the U.S. neo-cons, OIL prices have only one way to go: UP. Iran, after all, is sitting on very large oil reserves. In the short term Iran could chose to stop oil exports altogether, should the U.S. turn up the heat. While an outright attack on Iran would do to OIL prices what the invasion of Iraq did: see them double.
Any slowing (sorry “moderation”) in U.S. economic activity will be too little, too late to have an impact on OIL prices. The short term target is USD 80, but USD 100 a barrel seems to be the consensus forecast.
Labels: Condoleeza's role in the Lebanon Peace Process, The Trouble with Gangsters
