Greenspan denies oil will impact economy as feared
May 20, 2005
Alan Greenspan said on Friday that even though surging energy prices in the past two years have had a “prominent” effect on the economy in the United States, it has not had as big an effect as have other events, including the September 11 attacks, two stock market slumps, and a number of corporate scandals have had.
The remarks were included in prepared remarks for a speech to be given Friday before the Economic Club of New York. Greenspan played down the comparisons some analysts have made between the current energy situation and the energy crisis of the 1970s. He pointed out that current oil prices, when adjusted for inflation, are only at three-fourths of the peak level reached in 1981.
Greenspan also held out the possibility that current stockpiles of oil are at higher levels than they have been in years and that unless something changes - demand rises, output falls, or storage space runs out - inventories will continue to rise, and that this could work in favor of slowing or halting oil price increases.
The Fed’s chairman also expressed his opinion that changes in the ways and amounts of energy consumed by the US could change the economy in significant ways.
Dollar rally strengthens against euro
May 20, 2005
A continuing string of recent negative economic news in recent weeks, it was expected by some that the US dollar would end its recent rally.
After a stall in the middle of the week, however, the dollar on Friday reached its highest level against the euro since the beginning of the year. It also hit a one-month high in relation to the yen.
Some of the news that was expected to send the dollar on a downward trend against other currencies included figures showing that core consumer prices were unchanged in April, even though a 0.2 percent rise had been expected.
Additionally, industrial production figures were down 0.2 percent in April. Some rationalized that most of that decline came from the automotive sector, which served to neutralize its effect.
Then, most recently, data released on Monday by the US Treasury department showed that net portfolio inflows into the US fell to $45.7 billion in March, down from $81.4 billion in February and the lowest since October 2003.
By the middle of the afternoon on Friday in New York, the dollar had risen 0.5 percent for the week in relation to the euro, to $1.2550, and it gained 0.8 percent against the yen to stand at ¥108.10. The dollar also rose in relation to sterling, where it gained 1.3 percent to $1.8260.
USD peaks on 7-month high
May 16, 2005
The US dollar managed to hit a seven-month high in relation to the euro in early trading, when
it rose to $1.2582.
By mid-afternoon, though, it had fallen back to $1.2625, 0.1 percent off of Friday’s close.
The dollar had been rising due to last week’s good US economic news.
However, a report issued Monday morning said that net capital inflows into the US had fallen to the lowest level since October 2003.
This created worries concerning how the U.S. will fund its deficits. The dollar rose in relation to the yen, though, to ¥107.10 at mid-afternoon. It had been even higher, to ¥107.79, earlier in the day.
Dollar on 6-month high against euro
May 13, 2005
The US dollar set a fresh six-month high against the euro in Friday after doing
so on Thursday as well. The dollar was up another 0.4 cents to $1.2634 in relation to the euro on Friday.
This was its strongest position since October 21 of last year. It gained 3.2 cents on the euro for the week. The dollar also rose in relation to sterling, the Swiss franc, and the yen. It set a three-month high in relation to sterling as it rose 0.8 cents to $1.8552.
The dollar also reached a three month high by gaining 0.8 centimes against the Swiss franc to sit at SFr1.2232. The dollar rose ¥0.3 to ¥107.11 against the yen.
Pentagon to save $20 billion restructuring military bases
May 13, 2005
Citing the changing realities of a post-Cold War world, the Pentagon on Friday recommended the closure of 33 large US military bases and the alteration of 29 others.
It also recommended the closure or restructuring of 775 smaller bases and other military installations around the country over six years.
This follows a previous recommendation that US military bases in South Korea and Germany be closed, a move that would return 70,000 US troops to the United States.
Those foreign closures may not proceed as quickly as the Pentagon had hoped, however, after the release of an independent committee’s report this week that said too rapid a pull-out could endanger US national security.
Besides serving the stated purpose of retooling the military for current international realities, the base closures will save the government a great deal of money.
The domestic base closures will save the government around $50 billion dollars in the next 20 years, and the closing the South Korean and German bases will save another $14 billion.
However, many of the proposed base closures in the U.S. will certainly be fought by the surrounding communities and the elected representatives that serve those areas, as closing bases will have an enormous detrimental effect on the economies of those communities.
Dollar enjoys strength on retail figures
May 12, 2005
The US dollar was up in relation to the euro, the yen, sterling, and the Australian dollar in Thursday’s mid-day trading in New York as strong retail sales figures added to previous good news on employment and trade.
The dollar reached a six-month high against the euro as it rose 0.8 percent to $1.2706; it was also up 0.9 percent in relation to the yen, to ¥106.68, a three-week high.
US currency was also up in relation to sterling, rising 0.3 percent to $1.8658, a six-week high, and it advanced 0.9 percent in relation to the Australian dollar, to $0.7664.
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