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Friday, May 6, 2011


The free market dynamics wreaked havoc on the world economy yesterday; but it was a havoc which had both good and bad implications.

According to the BBC, “Commodity prices fell on Thursday for a fourth day, following weak economic news from Europe and the US.”

Oil prices were also down by as much as 10% at one stage, with US light, sweet crude ending the day below $100 a barrel.

However, US weekly jobless claims hit an eight-month high last week, and German industrial orders fell unexpectedly.

There are also concerns about what will happen to the US economy when the latest round of quantitative easing, known as QE2, ends.

According to Chris Jarvis at Caprock Risk Management in New Hampshire, "Crude oil is selling off sharply for two primary reasons: QE2 is coming to an end in June and without a QE3 behind it, it will take liquidity out of the market, hurting risky asset classes such as commodities".

One school of thought is now that Osama Bin Laden is dead, “the market is adjusting the geopolitical risk premium down accordingly."

Lately, we have been “lumping” every negative impact on the St. Lucia economy on world market dynamics.  How will these new developments play out this time? How will it reflect on the price of fuel? Where are our “blame game” analysts to enlighten us on the way forward? What does the foreign minister have to say? What are his projections?

1 comment:

  1. Gas will be up be more than a dollar next week. Tucker and his crew are clueless.