17-Sep-2010

p2-currencyi

Japan starts the race to devalue currency

+ Bank of Japan (BoJ) this week has purchased an estimated $23 billion U.S. dollars (selling Yen) to lower their currency.

+ In 2004, BoJ spent an est. $1 trillion in the FX market and it took several hundred billion before there was any material impact.

+ “Most governments around the world want to depreciate their currency in order to stimulate growth, and exports, and create jobs … you can’t depreciate gold or print more gold” Mark O’Bryne, GoldCore Ltd. in Dublin.


+ “No other nation wants to see their currency rise relative to the yen … or to any other currency.” (Dennis Gartman, Sept. 2010)

Get ready for more Quantitative Easing (QE II)

+ Fed meets Tuesday and no major changes are expected, but will run its printing presses and prepare to issue another round of monetary easing.

+ U.S. consumer is buying only what they need, avoiding up-scale non-necessities. Meanwhile their savings rate has jumped from 1% in 2005, 2% mid- ’08, 5.5% mid ’09, and recently 6.1%. So the consumer is buying soap, shaving cream and saving money. The “Three S’s”. (Dennis Gartman, Sept. 2010)

Energy Resource Conservation Board conditionally approved Total E&P Canada Ltd.’s upgrader in Strathcona County

+ Eventually convert 300,000 barrels of bitumen from the oilsands into synthetic crude each day. Cost could be over $7.5 billion.

+ Approval comes with conditions. Sulphur recovery rate has to be 99.5% within six months of the startup, company must conduct a full emergency response before any work is done and avoid noise pollution.

+ Construction must begin by Oct. 1, 2016 and will contribute $300 million federal taxes, $200 million provincial taxes, and $20-$30 million property taxes to the county every year.