International oil price trend and investment strat

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2008 international oil price trend and investment strategy

2008 international oil price trend and investment strategy

January 10, 2008

[China paint information] on January 2, 2008, the international crude oil price broke through the $100 mark, reaching a record high, thus triggering an international political and economic "earthquake", and the global inflation expectation is strong in salt. Will the oil price remain high and rise continuously in 2008? Answering this question scientifically is not only the basis for formulating effective foreign policies, but also the policy basis for doing a good job in macro-control and realizing the healthy development of the economy from overheating: because oil prices affect prices, prices affect people's hearts, people's hearts affect stability, and stability affects benefits

First, the high oil price will continue

on the surface, the high oil price is the result of the international political turmoil, especially the tension in important oil producing areas such as the Middle East and the recent turbulence in oil producing country Nigeria, which has played a role in fuelling the high oil price. However, the main core factor of the rise in oil prices is the United States, which is the result of the battle to defend the status of the dollar as an international currency. In the case of double deficits, in order to maintain the "confidence value" of the U.S. dollar, under the condition of the bankruptcy of the gold standard, the United States can only control the indispensable oil resources in modern society and make oil play a confidence role in the intrinsic value of the U.S. dollar. Only when the U.S. dollar flows to the world under the double deficits can it have the function of means of payment and reserve currency, and the United States can realize the great transfer of wealth to the world by exporting currency and importing wealth, Through international trade and international financial markets, the surplus value of "backward countries" will be transferred to American residents and treasuries

in order to preserve the imaginary value of the dollar, the United States did not hesitate to launch the war in Afghanistan, the war in Iraq, and the Iranian nuclear issue. When it was proved that the Iranian nuclear issue was a lie made by the United States, the United States cut a piece of rotten meat on its own body: "the sub-prime debt crisis", and spread the financial virus "the sub-prime debt crisis" to the world, As a result, it is difficult to learn a new round of testing technology courses, which is known as currency dumping. In this way, by worsening the geopolitical situation politically and dumping dollars economically, both hands have intensified the relationship between oil supply and demand, forcing the international oil price to rise steadily. Judging from the current situation, the United States has taken currency dumping and creating international turbulence as the main strategy to solve its huge domestic debt problem. Before the new president takes office, this strategy will not change greatly. The U.S. factor of continuous rise in international oil prices will continue. In 2008, oil prices will still rise irrationally under the "rational" regulation of the United States

II. Price trend under high oil prices

first, the rise in oil prices not only has a direct effect on the rise of industrial production costs, but also leads to an increase in the living costs of oil consumers. The soaring oil price has a more comprehensive and extensive penetration into the daily lives of ordinary people. The modern transportation industry has to raise freight rates to make up for losses. The upward trend of freight rates will inevitably lead to the rise in the prices of various consumer goods, and eventually push up the prices of daily necessities, rice, oil and salt, thus causing the overall rise of CPI

second, the rise in oil prices has increased the cost of grain production and made it more difficult to control prices. The costs of pesticides and fertilizers in grain production are directly related to oil prices. High oil prices directly push up the cost of grain production. If grain prices cannot keep up with the rise of production costs, it will still inhibit the improvement of agricultural productivity, especially under the condition of global warming, the use of pesticides and fertilizers will rise sharply. In view of this global consensus, grain prices have continued to rise to record highs or new highs in the futures market. In the Chicago futures market, the weathervane of international grain prices, recently, the price of wheat futures rose 16 cents to $9.31 per bushel, approaching a record high. The price of soybean futures rose to $12.38, a 34 year high, and the price of corn futures was 11 year high from the recent record. In Paris, rapeseed prices rose to an all-time high, up 1.5% to 444.75 euros per ton, and Malaysian palm oil futures hit a record high of $961 per ton yesterday. As grain and rapeseed are key raw materials for biofuels, the rise in oil prices has brought a huge boost to agricultural commodity prices. In 2007, the return level of agricultural bulk commodity market was the highest in nearly 30 years

third, the impulse to convert food into bioenergy has intensified, which will further tighten food supply and stimulate food prices to rise. Under high oil prices, the demand for crops in food, feed and fuel is mixed, resulting in a geometric growth in the demand for agricultural products. However, due to the serious food shortage in the world, the development of biofuels has been growing due to high oil prices. Gulkan, director of the food outlook program of the United Nations Food and Agriculture Organization (FAO), said that in the past decade, the global grain reserves have been decreasing, and the current reserves are only enough to last for 57 days. Barcelona food resources organization pointed out that as many farmers are ready to switch to biofuel crops that can bring high profits, the food supply has further deteriorated. In 2007, American farmers used 14million tons of corn, equivalent to 20% of the total corn output, to refine automobile fuel ethanol, and the world corn price nearly doubled. Because the corn exports of the United States account for 70% of the total global exports, Japan, Egypt and Mexico require a positive relationship between displacement changes and resistance changes. Countries such as Spain and Mexico all import corn from the United States. Will international goods and labels made from them be completely burned after reprocessing? IMF believes that if the expansion of the use of biofuels continues, using food as a fuel source may have a serious impact on food demand, with exports and imports of the chemical industry of 162.1 billion and 186.5 billion dollars respectively. In 2010, the global demand for biofuels may increase from 10billion gallons per year in 2005 to 25billion gallons per year, equivalent to an annual growth rate of 20%. High oil prices are bound to bid farewell to low food prices, and the world will enter an era of high food prices. For this reason, China will end the golden age of low inflation and high growth

Price trends and macro policies

first, when the international oil price is regulated by the United States, China's macro-control policy must fully consider the international background. Rising oil prices will inevitably lead to rising prices of other raw materials and resources, and the cost of China's imports will rise sharply, thus hedging the growth of export profits. In 2008, under the condition of high oil prices, it is impossible for macro-control to realize the comprehensive recovery of agriculture only through the "heavy agriculture" policy. U.S. agriculture is laid out under the international "chess game", which ensures the maintenance of the international competitiveness of U.S. agriculture through comprehensive and high subsidies to agriculture, and destroys the agriculture of the third world countries through price dumping, thus storing another strategic weapon besides oil. At the same time of dollar dumping, the United States has come up with a strategy to raise the prices of grain and oil at the same time, forcing China, which has a large number of oil imports and unstable food security, to pay high costs. As soon as the United States reduces its corn exports, the global food and food prices will rise. The rise in food prices will inevitably promote the expectation of rising interest rates, thereby intensifying the international pressure on the appreciation of the RMB. The accelerated appreciation of the RMB means that the United States is constantly writing off its debt to China. In, under the condition of a bumper grain harvest in China, grain prices hurt farmers, and agricultural protection was not done well, resulting in a large number of sows being slaughtered. Under the sudden attack of blue ear disease, the illusion of low prices left overnight

second, inflation expectations will increase. With the high oil price and the panic of the energy crisis, the international competition to ensure oil supply has become very fierce. The political turmoil in the Middle East, South Asia and other oil producing countries has fuelled the rise in oil prices. The fear of the energy crisis will inevitably lead to an increase in the demand for oil reserves, which will exacerbate the rise in oil demand in the short term. The rise in oil demand, the proliferation of petrodollars, and the path of dollar dumping are more relaxed, resulting in worldwide dollar dumping and the strong formation of worldwide upward pressure on prices and inflation expectations

Third, in order to prevent excessive inflation expectations, China must adopt economic, administrative and legal means. The tight monetary policy will be tighter this spring because of high oil prices. The management of loan quota will probably be the strictest in a decade, which will form a greater depression on small and medium-sized enterprises. The rise in interest rates is used cautiously because of the impulse to balance the appreciation of the local currency. Under normal circumstances, the one-year deposit interest rate is about 5.22%, and the highest expectation is not to exceed 5.49%. The deposit margin rate will also be strengthened, reaching about 16.5%. This strong monetary policy will inevitably form a Matthew effect, the concentration of the industry will increase, and the profits will inevitably tilt to the national policy, so as to provide clear ideas for investment strategies under high oil prices

IV. profit drift and investment strategy

under the condition of high international oil prices and the prices of means of production, international inflation has been continuously transmitted to the Chinese economy through international trade. China's economy has introduced anti inflation policies under the multiple pressures of high price imports, low price imports and the continuous depreciation of foreign exchange reserves and the appreciation of the local currency. Therefore, it is a policy regulation work in a contradictory state. Recently, the intensive policy of abolishing import tariffs on resources, raw materials and energy and imposing export tariffs on some high-energy consuming industries can partially stabilize the impact of international oil prices on prices in China, but it cannot change the basic pattern. The appreciation of the local currency and high energy prices will inevitably lead to an increase in the concentration and profit concentration of real estate, finance, resources and energy industries, that is, 20% of large state-owned enterprises will account for more than 80% of the profit contribution rate. It is expected that this phenomenon will continue in 2008, and the so-called big blue chip market will appear when the summer comes

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