Pricing crude oil out of the Dollar this Fourth of July...
SO THIS WEEK'S spike in the price of Brent crude oil to $73.50 was
due to a "rogue trader".
His unauthorized dealing through the PVM brokerage reportedly sparked 30
times the typical trading volume and incurred a loss of $10 million.
Whatever the regulators missed this time, that spike hardly compares to last
summer's run. But averaging nearly $70 per barrel in June, the price of US
crude oil just matched its average
monthly price of the last four years.
No, that's not much of a recovery given the monthly top of $132 per barrel
hit this month and last in 2008. And it's peanuts next to the record daily
close of $145 hit on Bastille Day, July 14th '08.
This Fourth of July, however, and not least if you're out driving, spare a
thought for just how much more expensive crude oil and thus transport, heating,
detergents and plastics are today than back before the credit bubble morphed
into the financial crisis and then into today's global depression.
Also note how the spike of '08 was only slightly tempered for European drivers
and households when the North Sea benchmark, Brent crude, is priced out of
Dollars and into the British Pound.
Whereas, if priced in Gold -
a simple enough concept amid rumors and counter-rumors of Chinese grumping
over the Dollar's volatility and the search for a new world reserve basis -
crude oil is now back pretty much where it was throughout the low and falling
trend of the late 1980s and 1990s.
Just a thought. Happy holidays if you got any independence to mark.
Formerly City correspondent for The Daily Reckoning in London and head of
editorial at the UK's leading financial advisory for private investors, Adrian
Ash is the head of research at BullionVault,
where you can buy gold today vaulted
in Zurich on $3 spreads and 0.8% dealing fees.
About BullionVault
BullionVault is the secure, low-cost
gold and silver exchange for private investors. It enables you to buy and sell
professional-grade bullion at live prices online, storing your physical property
in market-accredited, non-bank vaults in London, New York and Zurich.
By February 2011, less than six years after launch, more than 21,000 people
from 97 countries used BullionVault,
owning well over 21 tonnes of physical gold (US$940m) and 140 tonnes of physical
silver (US$129m) as their outright property. There is no minimum investment
and users can deal as little as one gram at a time. Each user's unique holding
is proven, each day, by the public reconciliation of client property with formal
bullion-market bar lists.
BullionVault is a full member of
professional trade body the London Bullion Market Association (LBMA). Its innovative
online platform was recognized in 2009 by the UK's prestigious Queen's Awards
for Enterprise. In June 2010, the gold industry's key market-development body
the World Gold Council (www.gold.org) joined
with the internet and technology fund Augmentum Capital, which is backed by
the London listed Rothschild Investment Trust (RIT Capital Partners), in making
an $18.8 million (£12.5m) investment in the business.
Please Note: This article is to inform your thinking, not lead it.
Only you can decide the best place for your money, and any decision you make
will put your money at risk. Information or data included here may have already
been overtaken by events - and must be verified elsewhere - should you choose
to act on it.
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