Indonesian Rupiah still do nothing against $US

After run in economic downturn, all sectors have been attacked so hard. Business run in profit loss and major industries such as Panasonic Hitachi, Sony and others gained net loss in their quarter report in economic downturn.
Indonesian Rupiah shows nothing changes after closing weekend couple hours before. Brokers and investors still wait US economic recovery progress after stimulation package economic recovery is launched. Both of them (Brokers and Investors) still wait to release their US Dollar in market for profit taking or for investment.

Market still waits and the situation went worst after declining report on Indonesian International Trading- Balance of Payment. Indonesian Export took hard suffer on economic downturn. Low in foreign demand is main factor behind the internal impact on crisis such as expensive on input price, inflation and exchange rate as the main factor in trading.
Our local television reported that crisis has attacked export in developing countries and also focus on China as new tiger from Asia because Chinese products for export is being declined due the lowering demand in any countries. European and America is main destination of their export products and we have seen that economic downturn caused demand for export good is significant decrease.

Over production and over supply for export products now happened on any exporters business. To increase export is depended on foreign demand. New hope is to find new buyer.
American Recovery program is running now and anybody still wait it.

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Recovery Program on CitiGroup, CitiCorp and City Holdings

One of US Giant Banking CitiGroup announced that they are in planning to divide their business into 2 different companies, Citicorp and City Holdings. This plan was published after financial reported on fourth quarterly report showed a big profit loss around $8.28 millions USD.
To make deep focus in their main goal, where Citicorp will focus on retail banking and commercial business and Citi Holdings focus on management asset division and securities.

As we know, Citigroup is one of bailout members from US Government with a lot of money around $45 millions USD and Citigroup also gets back up from US government as bailsman on treasury and high risk loans around $306 millions USD.
To BBC News reporter, CEO Citigroup Vikram Pandit said that our new strategy is to make more focus on our business and company. Market condition and Economy recession made us to fast our feet, to repair our high profit loss and to increase our performance as one of the American Giant Banking.

Analysts said that the separation into 2 company showed that Citigroup try to build strong business and to get profit from debtors’ interest rate and they will get it beyond on citygroup.

Citicorp has lighter goal and duty but City Holding will responsible on Bad Loans (high risk loans) and to choice which profitable investment in future. To make it goes well, Citicorp now looks for new manager with strongest vision to help Citicorp and CityGroup escapes from problems.

While downed into crash, CityGroup CEO Pandit said that they have commitment to help financial recovery in faster and to build fresh and health financial market in near.

Source: BBC News

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Indonesian Non Performing Loan Report

Indonesia Non Performing Loan (NPL) estimation is being increased in 2009 this year. The statement was said by Mr. Muliaman D Hadad Deputy of Indonesia Central Bank (Bank Indonesia) in Jakarta Tuesday.

The deputy said that cash liquidity (financial liquidity risk) is ok as well as market risk but credit risk is estimated to higher (trend). It is a normal condition, while global financial crisis and global economic crisis attacked all countries. Low on Demand (purchasing power parity) then declined demand for goods. Both credit loans from household and industries go to trouble. Crisis took to long to recover so we have no reason to wait better condition in foreign demanders.

Indonesia Exporters are attacked so hard as global crisis, Low of Demand in America and Europe made exporters to cut their production and employers as over stocks. Domestic market is potential market but there the multiplier of global crisis has already been arriving in Indonesia so it is not a good market. Chairman of KADIN said that to prevent worst condition to exporters, Indonesian Exporters must replace foreign market to domestic. Indonesia has big population and they are potential demand.

Indonesia Central Bank (Bank Indonesia) estimated that the growth of credit risk rate is set around 5 percent, higher than Banking NPL Gross in 2008 reached 4 percent.

The Global Financial and Economic Crisis forced Investors didn’t do anything, just stay and wait for better condition, So Banks have much money, unused money in banks but there are some banks have problem with cash liquidity and Mr. Muliaman said Central Bank (Bank Indonesia) will choose best plan to repair segmentation between banks, more cash liquidity and lower cash liquidity. Monitoring is good solution Mr. Muliaman said

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Sri Mulyani Stated on Government Budget

Indonesian government claimed that there are available government budget around 60 billion IRD till December 2008. Indonesian finance minister Sri Mulyani said that the budget was obtained from tax revenue and the unused government spending on several departments. The statement was launched Sri Mulyani in teleconference with traders in Indonesia Stock Exchange on Tuesday December 30th. Indonesia Stock Exchange will open on January 5th 2009 on Indonesia local time.

Indonesia Finance minister said that the fund would increase in near as the tax revenue. The realization of tax revenue is higher that estimated around 5 – 6 percent as the new assessable risen. Mulyani showed this happiness and smile as the appreciation from assessable.
She also said that only 93-95 percent of total fund is spent, so according to minister, remain budget will be used as the economic stimulator in 2009 to refresh Indonesia economic around 12.5 billion IRD.

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Indonesian Cocoa Export Yearly Report

National cocoa exports in 2008 decreased approximately 20 percent of export realization in 2007 reached 532,000 tons. Halim Razak as Chairman of General Association of Indonesian Cocoa said that the decreasing of cocoa export is caused by global crisis and the lowering of total cocoa production on this year.

According to him, the slope of export is influenced by the amount of gradually production. As an illustration, in 2006 the total cocoa production was around 900,000 tons, and then decreased in 2007 to be 532,000 tons, and this year's predicted around 490,000 tons.
Meanwhile, domestic market is estimated reach of 230,000 tons per year. Thus, if the cocoa production has decreased, while domestic demand is relatively fixed, then the cocoa export allocations to be decreased.

The condition goes to worst if we see the price trend in recent six months. In September 2008, the price of cocoa is still 2,600 U.S. dollars per ton, now only around 2,100 tons of U.S. dollars, while local market price for cocoa in September 2008 is still 3.500/kg Indonesian currency, but now only about 18.000/kg Indonesian currency.

South Sulawesi and West Sulawesi is the center of national cocoa production, take around 70 percent of Indonesian cocoa production. Halim Razak also said that decreasing of total cocoa production is caused by the cocoa age is over 15 year-at the period the plant result lower production. He also told that to solve the condition, government must help the farmer to replace with newer and to kill the cocoa disease.

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Israel Hamas conflict Recession goes to worst

Conflict between Israel and Hamas in Gaza, Palestinians, estimated to add global recession impact deeper and takes time to recover. First is financial crisis and now Hamas-Israel conflict. When global economic find itself momentum to health?

Indonesian economist said that Indonesia will down worst against the conflict in economy. Indonesia will enter a long difficult period. He said that the victims of the conflict are Palestinians and the global people whom get directly impact on conflict. According to him in few days’ impact of this conflict will be felt such as gold price, and crude oil prices. There are some argumentations from him related to the Hamas-Israel conflict.

Pure conflict or Not
We do not know the economic reason (behind the screen) except revenge of Israel against their citizen killed by Palestinian militant rocket. Some prediction said that the conflict is raised in order to increase oil price. As we know, oil price is still cheaper, below $50 USD per barrel. Middle-East countries have already been suffered by the price.
The fact, the conflict makes global economic recover to be worst and takes time. Oil price run higher $2 USD per barrel, higher on gold, mineral, agriculture commodities as investors take time to see the both short and long term impact.

Message to New USA President
He said on Indonesian online newspaper, Detik; the conflict has one mission for Obama. This is first test for Obama related to his mission in Middle East, Does Obama stay behind Israel or not. But the conflict sends a special message to world that if the conflict continues, the economic recover shall not down into bigger depression.

source Kompas.com

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New Deal between AIG and Munich Re

Monday 22 December 2008 towards the end of the year, AIG (American International Group Inc.) do not know with the privatization will sell Harford Steam Boiler (one business unit) to reinsure the German company Germany Munich Re for $ 742 million. Sales conducted as this effort as company rescue and as a step to pay the loan.

The purchase price is considered lower than the price of HSB Group Inc. 's, which has reached $ 1 billion and $ 2 billion by the Financial Times, which forced them to sell assets, assets to the government loan to pay for the United States (U.S. government bailout loan) government loan.

To reporters, Joerg Schneider, Chief of Munic Re Financial said that the financial condition when they face now is not something that is expected and dreamed recently.

AIG spokesman said that they have no good reason or dare to comment because the transaction has not agreed to terms, but Douglas Elliot, AIG spokesman explained that this transaction is uncertainty in the market and of course their clients (the German reinsire Munich Re) Munich Re plans to complete the purchase in the first quarter of 2009 next year, and will assume $ 76 million as of HSB's outstanding capital securities.

HSB, which is based in Hardford, Conn, is one of the subsidiary of the Hartford Steam Boiler Inspection and Insurance Company with the task of engineering insurance and inspection.

Peter Roeder, Munich Re board member responsible for business HSB in America, said HSB is interesting, because low-risk investment because only play in the field of business only. Acquisition HSB process is perfect as a strategy for market entry to the United States. This is a good step in restoring our position as one of the best and the purchase is regarded as a high ROI

Reinsures sell backup coverage to other insurers, as one of risk management, and when problems occur, the system can handle large or widespread losses. Munich Re also operates ERGO, one of Germany's largest insurer, and Munich Reinsurance America Inc.

HSB is romoured will be sold, as an effort to get fresh funds to restore the emergency loan from the government of the United States about U.S. $ 150 billion in a rescue effort from the government of the United States against companies that have problems in the credit crisis or credit misfire

AIG also received the actual injection of funds from the Fed of $ 85 million USD in an attempt to overcome credit problems and the debt is actually paid. Because the loan from the United States government $ 150 million USD have been paid by the AIG.

AIG does not expect much from the high price of the auction business unit that will be sold, but they will still maintain AIG as one of the U.S. property and casualty and foreign general insurance businesses, and retain ownership of their branches throughout the world as one of the insurance companies in the world

The Company does not have assets that are specifically disclosed it will sell or the expected price of the sale. However, AIG has said it plans to retain its U.S. property and casualty business and foreign general insurance, and plans to maintain a foreign ownership in life insurance operations.

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Japanese Economic runs negative growth as Global Crisis

Japan is reported to enter recession in third quarter as industries and companies have already been cut their investment plan caused by global financial crisis. Japan in this present runs behind America as biggest economy. Japan is also known helper (aider) countries for third countries (developing countries). Japanese Economic is being contracted 0.1 percent in months after decline 0.9 percent in second quarter.
The indication is shown in their Gross Domestic Product (GDP). Official staff said that Japanese GDP declined 0.4 percent based on their estimation after American crisis attack worldwide countries. As the biggest economic in Asia, Japanese GDP is reported lower than Analysts estimation; where estimators and analysts argued that Japanese economic grow 0.1 percent for each quarter.

Together with Germany and Italia, Japan is member of G-8; Japanese government formally has reported that they are in recession with negative growth. Beside Japan, outspoken also said that European counties also run in recession as each government staff said in conference time.

Not only this time Japan runs in recession, in 1990 Japan is also attacked recession (big bubble) and necessary action has been taken and Japan has succeed in recovery process, supported with good export prospect and business investment, while recovery in being processed, Global Financial Crisis made their recovery gone bad. Many industries decided to cut their expansion and long run investment such as open new fabric or invest in capital. Profit also declined on industries after demand for Japanese products is lower. United state is Japanese Export Target and crisis in America has made demand declined significantly. Lower on Japanese products also happened in Europeans countries, Asia and in all world.

Analysts predict that Japan economic will be recovered in near and predict 0.1 percent grow in 2009.

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G8+8 Meeting in Japan and Yudhoyono Idea

Indonesian president Mr. Susilo Bambang Yudhoyono is included as one of the chosen speaker on KTT G8 meeting on Wednesday July 9, 2008 in Tokyo Japan. Yodhoyono said that Indonesian will punish and try to involve Bali Road Map; resulting from International Conference. Indonesian considers that Climate is currently and urgent cases so Yudhoyono said that He will use the timing as speaker to talk about international environment and climate.

Yudhoyono stated to reporter, “I do remind them, to tell them to realize Bali Road Map. Both of us live under the same sun, live in the same earth, both development and developing countries must care the earth. Bali Road Map must be realized, based on the capability and responsibility and we must focus on Global Climate Change.

President’ staff Dino Patti Djalal said that Indonesia is included as guest on the meeting and Indonesian President gets an honor as the speaker on the G8 meeting.

G8 consist of Canada, France, Germany, Italy, Japan, Russia, England and America and the special guest are China, India, Mexico, South Africa, Indonesia, Australia and South Korea.

In 2007 G8 meeting in Helligendamm German, G8 established the meeting with 5 partners (new rising industry countries) but when Japan as Home, Japan invites others 3 countries (Indonesia, Australia and South Korea) so, the name isn’t G8+5 but G8+8 Submit meeting.

Some issues in their agenda are to make one vision and to make best and fair solutions about Global Climate Change, Food Security, Energy Crisis, Global Economic and Growth Issue. well play old men. We wish best payout from the meeting.

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Euro and Pound declined against USD Dollar

Dollar is appreciated against Euro and Pound on this Tuesday morning opening trade in New York Exchange Market. Declined against Dollar was started yesterday, Indonesia Times Zone. Brokers and Markets have been seeing the G8 Meeting, especially after Bush announced that FED and Federal are behind screen to support Dollar.

Yesterday, in my live trading Marketiva, Euro and Pound was declined more than 100 pips and now the trend still goes on. America is in Greenback reborn after celebrating their Independence Day on July 4th four days ago.

But Dollar can’t move faster and unlimited moving after Euro is fixed by Euro Central Bank at 1.5730/USD and available on previous Thursday a day before the American Independence Day. USD Dollar also strikes JPY Japan. Dollar was opened at 107.10 JPY from Thursday Closing time 105.84. Phenomenal Greenback is happened after Bush said that Government supports the strongest USD and report good news about American Reborn after Financial Crisis Storm.

Bank of Tokyo-Mitsubishi UFJ’ Analyst Osamu Takashima said that Bush Statement on pre-Opening G8 Meeting is only came from his position as President and also came from the Legal Statement. It doesn’t matter, but the important is Bush must restate his statement in the Meeting. Another analyst Kathy Lien from Forex Capital Management said that Brokers haven’t estimate possibility that Greenback is the main factor; otherwise she said that that Brokers are looking new sign, to profit or loss. Analysts agreed that Bush Statement is temporary times. Dollar is strong based on this statement but Bush can’t guarantee that Dollar will continue Strong against major currencies.

Markets stay for a while to see because G8 are also represented senior monetary chief from G8 countries, and FED’ Governor Ben Bernanke also talks in front American Congress on Thursday

Besides that, Germany Industry booked biggest lost in the last 11 years on Mei Data. Legal Data on Monday indicated that Germany had been recessing on second quarter this year. Data reported that Production from Industry sector is declined 2.4 percent on April. Germany Economic Minister claimed that this recession is only temporary fluctuation (Conjunction Trend). England Manufactory Data, published on Mei is also declined. National Statistic Department’ staff said that Manufactory is declined 0.5 percent on between April to Mei and Accumulating 0.8 percent in 12 months based estimating point.

Lowering 0.5 percent rose new fact that England has potentially down to crisis. The statement was said by Capital Economic Analyst Paul Dales.

Thursday closing time in New York Stock Market, Dollar is 1.0260 franc Swiss, and 1.9765 Pound.

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Supply creates its own Demand and Job Loss in America

Reuters News Mail on July 3rd put the first number one top news “Non-farm payrolls declined 62,000, more or less in line with the forecast of a decline of 60,000. Jobless claims came in at 404,000, a little higher than the 385,000 expected.

If we look back to 1997 when Most Asia Countries were attacked economic crisis, the fundamental reason is property business and mortgages. Property, real estate plays the storm for potential crisis. America is also attacked by this virus, subprime mortgages.

I would like to share my opinion to metropolis why Mortgages and Property Business could blast an economy. We put that land price is constant and have increasing trend in price for our assumption and Property Businessmen get their capital from loans.

Business property takes a biggest portion of Money from lenders (read: Banks). We see that a property from null to become standard house will spend less than $10.000 USD. When Demand from home is declined, businessmen couldn’t payback their loans, and in the long term will impact on credit problems, couldn’t payback will raise the sum of loans. This case goes worst when payday (salary) is being declined both in short and long term.

I put an example: How many employers are needed in Property Business Project?

Reuters News Mail said,” There were 43,00 jobs lost in construction in June as the housing slowdown continued to bite, while manufacturing shed 33,000 jobs. Both of these sectors have lost jobs in every month over the past year.

John B Say in Supply Create its own Demand will explain the phenomena. There are many job were lost. Then we can say the unemployment has no longer job, no job means no money. As the result their Purchasing Power Parity will lower and lower in the long term. Less in Demand will cause to industries sectors. Goods are full in storage, unsold able. Low in sales and low in profit will raise a fundamental decision, Efficiency, and the job cut (fired) is available on Managerial Mind.

We don’t talk about others errors in this case, such as lowering on Dollar, High Flying on Oil Crude and multiply effect to others sectors.

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New Record on Oil Price and Its Impact on Other Commodities Market

Both Light and Bret Oil Crude leapt for new $142 per barrel record yesterday, the impact has been attaching food sector (commodity market). Corn and Soybean were attacked and leaping to new record on Friday trading in Chicago Board of Trade (CBOT), but closed at lower price. Heavy rain in Midwest and close to update agriculture report announced next week, Market took profit taking for necessary actions.

Friday morning opening session, those commodities leapt significantly in last 2 days and the main reason is new record for oil crude.

December Shipping for Corn created its new record high $ 7.96 per bushel, but declined to $7.87 USD when closing time. November Shipping for Soybean also leapt new record high around $15.77 USD per bushel and declined on $15.59 USD in closing time. Beside Corn and Soybean, Wheat also declined on Friday, down to $9.12 per bushel for September Shipping.

Analyst from DTN, Elaine Kub said that Nebraska to predict that Federal Agriculture Department will push the market velocity in next week. According to Elaine; market needs slowly price fluctuation and step by step to see the complexity demand. “As you see, brokers decide to get profit taking and they do it carefully, Kub said.”

Troubling in AS Financial Market also impacted CBOT market, especially Rice and Oil. Dow Jones declined significantly around 400 point in recent two days to lowest level since November 2006. Light Sweet Oil touched $142.99 per barrel and closed at $140.21 per barrel in New York Mercantile Market or higher two points than previously.

NYMEX (New York Mercantile Exchange), Metal commodities also moved; Gold for August shipping raised $16.20 USD to $931.30 USD per troy ounce. Silver for June Shipping raised 49.5 cent to $17.62 USD per ounce.

Data processing from Bloomberg, Antara, Marketiva Live Desk, Reuters

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Gold Price and Analysis

In near, any stocks are very fluctuation. Oil price, inflation and interest rate harm market activities. Uncertain condition makes it worst. Investment on Gold is better than others investment types. Gold is more immune against Inflation. Indonesian Economist, Tony Prasetiantono said that Investment on Gold and any Metal are better than others kinds on investment consist of Stocks, Treasury and Exchange Market. Investment on Gold has the same level and profitable with invest on Land and Property. Incremental on Gold, Property and Land price are happened in uncertain periods but the price still running high on months and years.

Tony Prasetiantono said that the immune against inflation on Gold is caused that Inflation has positive correlation with Gold price, but Invest on Gold has some weakness. Because Gold is seen goods, gold is easy to steal and lost. So Gold is favorable chosen. Toni Prasetiantono said that investment on Gold is being trended in recent. Investors have two options to invest in Gold. Traditional Method; Buy Gold in physical gold and keep it, or they buy gold jewelry. And the last method is they buy unphysical gold in Stock, Obligation and other kinds of this tool.

Today, Wednesday 24/6, Gold investors still wait FED meeting. They would like to see where the FED’ policy are. FOMC (Federal Open Market Committee) has already been meeting since Tuesday, yesterday. Gold price in New York Mercantile Market for August Shipping rises $4.4 to $891.60 per troy ounce. Analyst Dave Meger from Alaron Trading stated that new price on gold was caused by declined on Dollar America against major currencies, and another external factors is waiting after FOMC finishes their meeting.

Hong Kong Trading on this morning, Gold price is opened at $886 – 887.00 per troy ounce, declined from Tuesday closing time at $889.50-890.00 USD per troy ounce.

Source: Kompas.com, Bloomberg.com, Reuters.com and Antara.co.id

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King Abdullah Commitment on Crisis Enegry Countries

To prevent the impacts on high oil price, King Abdullah decided to help crisis countries attacked by high oil price. Abdullah has some packages to help them. He decide to aid those countries with smart loans (loans with very low interest rate), increase their barrel on each day oil production, send an aid package to energy crisis countries, sounded to international financial institutions to meet in near soon, agenda to talk about currently issues.

King Abdullah has confirmed that their country will increase 200 barrel/day to 9.7 million barrel/day in Jeddah. Abdullah stated to indicate that he would like to push world oil crude to lower or to normal fair price. Outside countries, UN and Industries asked Abdullah to increase their oil production quota. With 200 barrel/day, Abdullah would like to aid developing countries which attacked directly impact on running high on oil price with his contribution around $1 billion USD through OPEC.

His speech on opening session exporter-importer meeting (OPEC and oil demanders), King Abdullah said that his action is based from their kingdom history. Arab takes ¼ portion of world oil production. Saudi Arabia will aid and donor $500 million in soft loans as the implementation to help poor countries that directly attacked on high oil price impacts.

Abdullah also asked and sounded to World Bank in order to create a meeting in near soon, to meet creditors and debtors counties and international financial institutions involved to sit together, create the implementation in real programs to help directly impacted countries.

Oil price was set around $139.89 for new record high in last Monday, but as the positive market respond on Abdullah statement, Oil price them run low. The running low is also caused by China Government decided to increase their oil price.

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Inflation and Interest Rate, Current Case in Indonesia

Indonesian Banks ready to increase interest rate of some savings; consist of Regular Savings, Fix and Durable Deposit, and Giro after LPS (Indonesian institutional for Saving Security) increased its interest rate to follow the inflation rapid and to avoid drain money from banks.
Yesterday, Vice President of BCA Jahja Setiatmadja said that they (BCA) would like to increase interest rate of those savings accounts. In BCA, annually Durable Deposit interest rate is 5.5 percent.
A week before, The LPS Meeting has been determining that in period June 15th to September 14th 2008, savings security interest for commercial banks is 8.5 percent or up 25 points, previously 8.25 percent. Newer savings security is 8.5 percent equivalent with Indonesian Reserve Bank (BI Rate) Interest rate reference.
Chief executive PLS Firdaus Djaelani said that the new 8.5 percent based on their consideration that in coming months, Banks will offers higher interest rate, to follow the inflation rate.
LPS (Saving Security) is a security and lender to guarantee costumers saving if the Banks collapsed. So Commercial Banks must follow their decision and rules. LPS guarantees up to 100 million IDR with 8.5 percent interest rate per year. LPS doesn’t guarantee costumers saving account if either 100 million IDR or 8.5 percent of interest rate are restricted.
A local Indonesian Banks (BRI) Official staff said that their bank still in progress to determine their bank has or hasn’t to adjust their interest rate. BRI still uses 5.25 percent per year for monthly durable deposit.
Interest rate is crucial indicator for Commercial Banks to keep their costumers. Higher dispute between Interest rate and Inflation rate will make costumers run their money from lower interest banks.
Until April 2008, Banks’ interest rate are decreasing trend. March 2008, Banks’ interest rate was around 6.84 percent per year, down to 6.81 percent per year in April. Lower deposit will make investment goes well, otherwise, running high on interest rate will make people put their money in Banks to get return.
General Chief of Commercial banks association, Sigit Pramono said, inefficiency banks (high cost) will increase their credit interest soon. “They (Banks) is still waiting each others, who is the leader to increase interest rate first.”
But for banks which cheap capital dominating, in short-term they find no reason to increase the current interest rate. They prefer cutting on their profit, better than increase the interest rate.

Source: Kompas.com.

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$ USD Resurrection!

Dollar has won against EURO and JPY (Yen Japan) at Thursday 13th June local time (American time zone), Euro declined to 1.5435 from 1.5554 at New York Stock Exchange. Against Japan Yen, Dollar raised to 107.91 JPY from 106.96 JPY. Increasing on Dollar was caused by positive retail sales data and investors and speculators were waiting the G8 finance ministers meeting results.

Based on the retail sales report, American retail sales increased 1.0 percent on May. Government has already been cut the tax on property and some items, and the impact is clear, pushed demand side (consumers) to consume. Time lag took several months after cutting on interest and taxes.

“The impact of tax cutting has been making our people start to consume more because real money for consumption is raised, Paul Ashworth said on Capital Economics based on AFP.”

Paul also said, “Generally 1.0 percent is good news and has given new resurrection on consumer trusting.”

“Bad situation has been over and gone. Time lag has been working well and now we get the result. We really hope the American economic will heal and recover faster, Michael Wooffolk from New York Mellon Bank said”.

“Although ECB (European Reserve Bank) interest rate is still high and crude oil price is flying, we don’t see those as restriction for American economic recovering. FED stand behind us, Paul also said.”

At the same time, G* finance minister meeting will meet in Osaka, Japan (Seven Industries Countries plus Russia) on Friday and Saturday. Japanese Staffs have said disagree if foreign exchange is included to the agenda, because Governors of Each Reserve Bank are not there, but it is a final decision and we will discuss it.

Ryohei Muramatsu, Group Treasury Asia of Commerzbank Manager said, “$ USD has been more attention from their government, and governments declined their previously statement. Federal will intervene Foreign Market necessary to win the $ USD.

Thursday 12th and Friday 13th, Bank of Japan (BoJ) met to study about Japanese interest rate. BoJ had no reason to intervene interest rate, so 0.5 percent is still settled in uncertain world economic condition.

On weekend closing time, JPY is closed at 1.0416 franc Swiss from 1.0318 franc at Wednesday.

Source

www.kompas.com,

www.Reuters.com,

www.yntimes.com,

www.businessweek.com.

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Chapter Two $130 USD per barrel is Shadow Price

The economist was right. Current oil price is shadow price, made by investors and speculators on trading but the fact the real oil price is around $70-$80 USD per barrel. With external intervention, oil price run bigger than 50 percent and made it new record $134 USD per barrel on last week. I have posted many articles about the naughty investors and speculators behavior such as Who behind Uncontrolled Oil Price, Demonstration against Government Decision Cutting Oil Subsidy, Oil and Food, Oil price and China’s Demand , Oil US Dollar and Investor, Government Deletes The Oil Subsidy , Hello Investors! Why did you do to us? with one summary, They took profit otherwise they make more unemployment people, more poverty, more hunger countries, high inflation in countries, politics destabilization in countries, lowering purchasing power parity, increasing on price in all sectors and more. Transportation sector demand for repairing current tariff, goods and markets also do the same while citizen still in lower PPP (Purchasing Power Parity).

So what the meaning of $130 USD per barrel as Shadow Price? Shadow price doesn’t describe the natural price (read real price) because had been intervened by external cost and factors. But the economist forgot something. He forgot that the shadow price is becoming real price and we buy oil with $130 USD per barrel not $70 USD per barrel. He also forgot that we can’t intervened to market, investors and speculators have much money; bigger than Indonesian budget. It is hard to make some intervention to the market; because if we haven’t no money and the market rules, no government intervention directly.

Continue to Chapter three; Shadow Price becomes Real Price

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Chapter One Oil Price is Shadow Price

Today on TV One, An Indonesian local Television Live Broadcast Debate Program had established funny, critique and economic approach on increasing of oil price. Funny means TV One invited two different key speakers expert, one from politician and second is economist so they don’t understand each others. While economist talked in economic world, the politician didn’t understand well otherwise the economist didn’t understand well.

Critique means independent economist didn’t agree about the current policy to handle increasing in oil price, otherwise, the politician agreed with the government.

Topic debate on the program are talking about the current government policy; cutting oil subsidy with increase the oil price and government policy to handle the impact on poverty people with directly cash aid (Bantuan Langsung Tunai).

I don’t agree with them both. Economist talked look like he made simple classic assumption on economic, no politics and it is about pure economic, so he suggested to government with pure economic policy, on other hand the politician (belonging to government) did politics and others social aspect on his talking.

The economist said that The Current Oil price is Shadow price; not real price. The politician didn’t understand about what shadow price and real price meant. That is the funny. More deep, Economist said that The current oil price is made by investors and speculators on stock market and foreign market exchange. American Congress had been called their Americans largest oil mining to ask the fact about oil production, how much it cost?

Continue to Chapter Two $130 USD per barrel is Shadow Price

Today on TV One, An Indonesian local Television Live Broadcast Debate Program had established funny, critique and economic approach on increasing of oil price. Funny means TV One invited two different key speakers expert, one from politician and second is economist so they don’t understand each others. While economist talked in economic world, the politician didn’t understand well otherwise the economist didn’t understand well.

Critique means independent economist didn’t agree about the current policy to handle increasing in oil price, otherwise, the politician agreed with the government.

Topic debate on the program are talking about the current government policy; cutting oil subsidy with increase the oil price and government policy to handle the impact on poverty people with directly cash aid (Bantuan Langsung Tunai).

I don’t agree with them both. Economist talked look like he made simple classic assumption on economic, no politics and it is about pure economic, so he suggested to government with pure economic policy, on other hand the politician (belonging to government) did politics and others social aspect on his talking.

The economist said that The Current Oil price is Shadow price; not real price. The politician didn’t understand about what shadow price and real price meant. That is the funny. More deep, Economist said that The current oil price is made by investors and speculators on stock market and foreign market exchange. American Congress had been called their Americans largest oil mining to ask the fact about oil production, how much it cost?

Continue to Chapter Two $130 USD per barrel is Shadow Price

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Information and poverty

A stupid on Metropolis Opinion

We have been arriving in 21st century, as wee see; there are many people in our regions, neighbors still living in poverty. Those people can’t escaped and still turn to this conditions. There are two opinions why these phenomena still raise and still in near; first, natural condition and the second is structural condition. I put my opinion and focus on the second reason.

My lecture was said, poverty is caused by people have no accessed to information. He made a funny statement to us; why I brave and capable to teach you (student)? There is only one reason; because I know the information first. You have great natural talent; but if you don’t raise and development your brain cell with information, you are nothing. I know first because I read the information first, right! So I dare to teach you.

Most people (experts) said; poverty can be handled with information. If you have more access to information; education, you have more opportunity to labor force, you have more opportunity to get good job. Good job will give you more money.

I think you can read my opinion in the end, More money means, you are out from poverty.

The question, then goes to government regulations, how to give more access to citizens. Rich countries have more money, more budget allocation to education sector (they also have more attention and do make their citizens smarter and have free access to all information.

Poor countries are in problems. The governments still focus in high growth on industry sector, so education and information becomes unhanded well.

Bill Gates has been here in my country Indonesia, He try to donor; aid and help our people to escape from poverty. He said, internet goes to home is best way to make better future from our kids. We hope our president and his staff will catch this changing seriously.

I received an email from our president (I don’t know the email accuracy, because every day Many spamming, device and indirect email). The email came from the president’s email; he told that I am invited to the palace to realize Bill Gates visiting, Information pushes poverty.

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We need more gold

World becomes crazy and uncertain and crash, economic recession in America makes all countries continuously ready to make some action to handle the impact. At least 12 years before, USD fall in record against Yen under 100/Yen Japan. USD also falls to Euro and GBP. Gold price rise upper 1000 tyros per ounce make all investor put their money and replace their USD into gold. The weakness of USD is also caused by oil price upper $ 100 USD per barrel and financial problem in America.

We need more gold

Increase in gold price is caused by breaking down the labor gold–mine in Africa (as we know, Africa is the producer gold number one). Increasing in gold and weakness the USD make investors now stay in hold, analysis and put their money in Yen and Euro.

Indonesian Rupiah must appreciate against USD but, the closing session yesterday, Rupiah closed at 9200 and more (weak more than 100 point)

While Dollar is weak and depreciates, all countries still use Dollar as foreign payment because of transparent and fluctuate. I know, many investors get high taking profit as the dollar fluctuating. They make us (poor people) pay more to get gas, gold, food, premium oil and all export goods. The businessmen also suffer by the weakness of Dollar.

Continue in next post.

Euro won against USD, What the impact in short run and long run

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