SOROS, Saudis, Other Billionaires on Price of Oil,Taxes

Posted on April 24, 2011


By johnransom…..News comes today that George Soros is upset with talk the US is trying to cut the federal budget. According to Reuters, Soros was addressing “a think-tank breakfast in Paris” <insert croissant joke here> and said that he was less upbeat about the US economy because of the proposed cuts.

“While currently the U.S. economy is improving, that is going to be a serious brake on that in terms of employment and effective demand,” he said.

“So I am a little bit less optimistic for the U.S. economy than most people are currently.”

Soros must have a HUGE short position in US dollars.

Soros has been accused of participating in attacks on currencies in Thailand, the UK and Russia, although he denies the charge. He’s been called “the man who broke the Bank of England.”

The Saudis are denying claims made by Goldman Sachs that the Arabian kingdom is exaggerating how much excess oil capacity they have, according to the Wall Street Journal.

The WSJ quoted a research note from Goldman on Tuesday:

“We believe that Saudi Arabia has been producing 0.5 million to 1 million barrels a day above the official numbers since November…implying that OPEC spare capacity is significantly lower than reported.” 

What’s at issue is how much more addition oil can be produced. The more oil still sitting on the sidelines, the better chance any disruption can be alleviated quickly.

Some analysts are saying that spare capacity has already dropped under 2 million barrels per day, according to the Journal. The Saudis says nonsense: Spare capacity is at 3.5 million barrels per day.

Whoever’s right, speculators are bidding prices up not because of a diminished supply of oil, but because of over-supply of dollars. Inflation is a monetary mechanism. When there is too much money, prices are going to go up. It’s the definition of inflation. Unfortunately we have a Federal Reserve Bank that forgot its main duty of fighting inflation and instead acts as Cheerleader-in-Chief for speculation.

When the commodity price bubble finally explodes, and it will, there will be a class of people who will be crying a river of tears.

One of those people will not be PIMCO’s Bill Gross 

On Monday, Gross, the manager of PIMCO’s Total Return Fund, told Yahoo Finance’s Aaron Task that we should be raising taxes on the wealthy into the 50 percent bracket. And, oh, by the way, we should be raising taxeson corporations too

MORE…… 9, 2011