il petrolio e l'oro salgono assieme nel lungo periodo - gz ¶
By: GZ on Lunedì 04 Ottobre 2004 13:07
Barron's ha dedicato la storia della settimana sabato a un guru dell'oro per cui ecco che il dollaro sale oggi e l'oro scende (un poco)
comunque faceva notare che il petrolio e l'oro salgono assieme nel lungo periodo e al momento il petrolio in termini di grammi di oro costa molto (e viceversa l'oro rispetto al petrolio costa poco)
2.27 grammi di oro per barile è la media del dopoguerra e siamo a 3.54 grammi di oro per barile
vedi grafico sotto
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OCTOBER 4, 2004 The Buck Drops Here
A longtime gold bull explains why he thinks a dollar collapse is inevitable By SANDRA WARD
AN INTERVIEW WITH JAMES TURK
.....If you look at the price of oil in terms of gold, which is the way I measure it, the historical average is about 2.27 grams of gold per barrel of crude oil. At present, it takes 3.54 gold grams to buy a barrel of crude oil. In the 704 months since January 1946, we've only been above that level six different times. What that means is that either crude oil is very, very expensive or gold is very, very cheap. I think it is the latter. We're consuming about 30 billion barrels of crude oil a year and that's not being replaced in current reserves and as a consequence crude oil is being re-evaluated by the market. The trigger for the revaluation was when Royal Dutch/Shell restated its reserves earlier this year. That shocked the market and the repercussions of that shock wave are still being felt and will be felt for years to come.
Not only did other companies start revaluing their reserves, but it gave rise to a lot of skepticism about the kind of reserves countries have and whether they are recoverable and, if they are, at what price? Where we see crude oil today is probably a natural reaction to the market coming to understand there is not an infinite amount of oil in the world.
Q: What's the relationship between oil and gold?
A: There's always been a strong relationship between crude oil and gold. There's a chart of crude oil and gold going back to 1946 in which crude oil is basically unchanged. The oil price, in gold terms, has fluctuated but it is not significantly different from where it was in 1946. In dollar terms, the chart shows the price of crude oil has been going quite high. Although crude oil is a little bit expensive in gold terms at the moment -- it is at the high end of the historical range -- it is not completely out of line with the historical relationship. What the climbing dollar price of crude oil reflects is inflation in the dollar over the last five or six decades.
Going back to the oil shock of the early 1970s, the reasons why oil prices shot up were as much economic as political. The price of crude oil had been fixed and that was fine when the dollar was still tied to $35 per ounce of gold. But when the dollar was taken off the gold standard in 1971, the price of crude oil remained the same in dollar terms. The oil exporting countries were getting less in real purchasing power so they made a big adjustment to recover what they were losing as a result of the dollar losing value. Oil is cheap at $50 a barrel by any kind of historical analysis. Any supply problem that arises, whether it's a disruption in Venezuela or labor strikes in Nigeria or political fallout in Russia, is bullish for oil. We should be focusing on $60 or more a barrel.
What developments with regard to gold should we focus on?
A: At the International Monetary Fund meeting coming up this week, European central banks are due to announce their new Washington agreement. Five years ago, in what was called the Washington Agreement on Gold, they limited the amount of gold they were going to sell from their coffers to 2000 tons, or 400 tons per year over five years. Earlier this year, these central banks said they were going to increase that amount and sell 2500 tons up from the 2000 tons previously, or 500 tons per year instead of 400 tons per year. But as we've approached the IMF meeting, it is becoming increasingly clear that not all of the governments that lined up earlier in the year are now willing to cooperate. As a consequence, it looks like a lot less than 500 tons per year is going to be sold even if they still announce the 2500 tons target in this new Washington agreement. There's a recognition that European central banks may be less willing to part with gold because they need to protect themselves against weakness in the U.S. dollar.
The Argentines also have been accumulating gold and there have been increases announced by the Chinese. So some central banks globally are taking a different view of gold.
Q: You've been comparing this period to the 'Seventies but were we as indebted then as we are now?
A: No, we weren't and we didn't have the levels of derivatives that we have today. We are carrying a much higher level of debt today relative to national income and that's a little bit scary. What it suggests is that cash flow is strained and, at the end of the day, cash flow is what counts. We are not in as strong a position today as we were back then to service the debt. We've been consuming well beyond our ability to produce and create wealth, which is why we've accumulated these huge imbalances and why we've gone from a creditor nation to a huge debtor nation today.
Q: Another big difference is inflation.
A: Because we've been able to import cheap goods from the rest of the world, prices have been subdued. That hasn't necessarily helped our overall economy. And it hasn't necessarily helped our overall debt situation, because these dollars are accumulating overseas.
The consumer price index is probably a bit misleading in terms of the underlying potential for inflation, which I think is huge. Keep in mind $50 oil is not just a U.S. phenomenon. The Chinese and Japanese also are going to be paying higher oil prices. They are also paying higher prices for commodities, and that comes back to us in the form of automobiles and refrigerators and what not. Those prices are going to start rising probably in the not-to-distant future.
Q: Expand on why you think the potential for inflation is huge.
A: For the simple reason that we are creating so many dollars. We have been controlling this huge creation of dollars so far by having them end up in central banks around the world. Ultimately, that process expands the opportunity for foreign central banks to expand their monetary base as well. By creating this huge amount of dollars by building a mountain of debt, we are reducing the purchasing power of the dollar. We are seeing it day in and day out. We talk today about 2% or 2½% inflation being tame today, but back in the early 1970s Nixon imposed wage controls when the inflation rate got to 3%. Inflation is much higher today than what the government numbers show, because of the impact of housing. The rental equivalent measure used by the government in calculating the consumer price index understates the cost of housing, which is the largest component of the CPI.
Nixon's price controls weren't a one-year or two-year event. It signaled a major macro shift that lasted for a decade. That's the basic point I'm making here. We're at the beginning of a major macro shift that is going to last for many, many more years. The best way to address that is to look back at the early 'Seventies because in terms of recent history that's the closest example of where we are today.
Q: Does the election play any role in your outlook?
A: Everything has been baked into the cake so that it matters little who assumes the office of the president in November. From a big picture point of view we've been living far beyond our means and as a consequence eventually the piper has to be paid. The recent actions of the Federal Reserve suggest they believe the economy can handle higher oil prices more easily than it can handle higher interest rates.
Q: How is that?
A: The Fed is raising interest rates slowly. If they wanted to defend the dollar and keep commodity prices from going through the roof they have to protect the dollar's purchasing power. They would do that by raising interest rates more rapidly. That's what former Fed Chairman Paul Volcker did in the late 1970s.
The Fed recognizes they can't raise interest rates because of the mountain of debt that confronts us. The economy wouldn't be able to handle the additional constraints placed on it that would result from higher rates. The Fed is allowing the dollar to go lower and as a consequence we are seeing higher oil prices and other higher commodity prices. The Fed has made that determination and that probably doesn't bode well for the dollar because the only way you save the dollar is through higher rates.
Otherwise, it's necessary to clamp down on the markets through capital controls. It's possible we might ultimately try that. I don't know what form the capital controls would take. There could be limits on how much foreign currency Americans can buy either in terms of investing abroad or buying foreign assets. There might be some kind of barriers imposed by the government to prevent free flow of capital both in and out of the U.S. As the federal budget finances worsen, there maybe some kind of imposition on tax-deferred plans in which X-percentage of assets must be invested in specially denominated long-term Treasury bonds to finance the growing federal deficit.
The key is that capital controls are a realistic possibility and the way you protect yourself against that possibility is to diversify now. Get out of the dollar now while you can still get out of the dollar. Buy foreign assets now while you can still buy foreign assets. Take advantage of the fact the dollar is still overvalued even though it is down from its peak. It has a lot more purchasing power today than it will a year or two or three down the road.
