Archives: 2007 November

Climate change will have a tremendous influence on commodity prices and your very survival as the 21st century progresses.

Perhaps the greatest challenge that the human race has ever confronted will develop around how we adapt to rapid change in climate driven living conditions by as early as 2020 to 2030. One man who has been called a “prophet of doom” regarding climate change is James Lovelock.

James Lovelock is a renowned and highly respected scientist who in the 1970’s developed the Gaia Theory ,which thinks of the earth as a self regulating living organism.

James Ephraim Lovelock was born on 26 July 1919 in Letchworth Garden City in the United Kingdom. He graduated as a chemist from Manchester University in 1941 and in 1948 received a Ph.D. degree in medicine from the London School of Hygiene and Tropical Medicine.

In 1959 he received the D.Sc. degree in biophysics from London University. After graduating from Manchester he started employment with the Medical Research Council at the National Institute for Medical Research in London. James Lovelock’s full bio is at his website.

You will see after even a quick review that James Lovelock has been right about a great many things in his lifetime. He is a man who needs to be taken seriously. The following was written by James Lovelock about a system, our earth, that is in the positive feedback stage.

Crude oil surges towards $100 a barrel, rallying nearly 3% to a new all-time high Tuesday, joining a broad based commodities rally, boosted by expectations for a drop in crude inventories and continued weakness in the dollar.

Crude for December delivery rallied $2.72 at $96.70 a barrel on the New York Mercantile Exchange. Earlier, crude posted a new record high of $97.

“What a rally,” said Phil Flynn, an analyst at Alaron Trading. “What a difference a day makes. This volatility is enough to give you vertigo.”

A day earlier, Monday, crude oil fell $1.95, or 2%, to close at $93.98 a barrel.

“What’s driving us today is a rebound in the stock market and more weakness in the dollar. It seems that this market is so focused on the outlook of the economy and it’s using the stock market as a gauge for that,” Flynn said.

“Tomorrow, we get the inventory numbers. We’re looking for a draw in supplies and that’s adding support,” Flynn said.

“Crude oil has shown remarkable resiliency, as price corrections continue to be shallow and short-lived,” said John Kilduff, an analyst at MF Global. “Doubtless, even though the market retains the technical capacity to stage a more extensive price correction, participants are probably very reluctant to press the short side of this market ahead of this week’s inventory reports.”

“Expectations are for a considerable decline in crude stocks, largely due to recent disruptions in Mexico’s oil shipments,” Kilduff said.

While there is now much talk about gold making an all time high above $850 an oz. for British investors, in terms of Pounds Sterling, gold has already made an all time high.

The gold market actually made its all time high in Pounds on October 29, 2007. Trading above $794 per ounce, the metal recorded a Morning Fix of £385.12 in London – beating the previous all-time high of £382.73 made on 12th May 2006 – before dropping 0.8% from the top as the Wall Street open drew near.

In US Dollar terms gold closed at $807 last Friday so it is not that far away from the all time high price of $850 oz. achieved in Jan. 1980.

Gold will probably make highs far above the old record of $850 this bull market cycle. The fall of the US Dollar, which may well turn into a true panic sell off at some point within the next year or two, is helping to support higher prices. With nothing backing up the value of the dollar except for decreasing faith in the US government the future of the dollar looks to be bleak.

Physical demand continues to be strong for gold. The expanding economies of China and India have increased the number of people in those countries who can regularity add to their gold holdings. Demand has generally been strong , even at higher prices, across most of Asia and the Mid East.