Obama and Oil..... A love hate relationship.

Reuters reports this week that Obama has promised to slowly cut the US dependence on oil over the next ten years by 1/3. This is directly related to the recent tensions that have been cutting the world in half- such as in Egypt, Ivory Coast, Tunisia, and Libya.

Obama outlined his strategy after spending days explaining the U.S.-led military action in Libya, where fighting, accompanied by unrest elsewhere in the Arab world, has helped push U.S. gasoline prices toward $4 a gallon.


This blog is dedicated to all my classmates who didn't believe me that, in my opinion, the reason why we are fighting in Libya is because of the oil it produces. I do like hearing that the US is wiling to working to being in a position where such a thing wouldn't matter. You'll notice in the quote below that Obama's reassurance is NOT that we'll pump out our own oil, but rather that the US will work towards developing new technology for energy.


"There are no quick fixes ... We will keep on being a victim to shifts in the oil market until we finally get serious about a long-term policy for secure, affordable energy," Obama said.

The original article can be found HERE.

Portugal's Government Potential Collapse

Portugal's government is facing a potential collapse after a debate began on Wednesday that may lead to a change in leadership. The current head of the government is apart of a Socialist party, which is in the minority. The issue in question was if the government would allow/force different government agencies to develop austerity measures to save their the economy.

"All opposition parties have proposed resolutions calling for the rejection of the measures, which reduce pensions and state spending"

The question here is whether this will put Portugal at risk of having to ask to be bailed out, in a similar fashion as Greece and Ireland has recently had to do. Portugal is apart of the European Union and it's financial crisis is affecting the value of the Euro, which is a concern as the Yen is struggling as well currently, following the disaster in Japan.

"The government had hoped to obtain support for its plan before Thursday's EU summit, to reduce market pressure on Portugal's sovereign debt."

This Blog was developed from two Reuters articles, found Here and Here.

Positive take on Japans disaster

Reuters has posted a article about the disaster in Japan that takes a new look at the disaster- how can the Japanese people take the disaster and use it to make themselves a stronger, better people- and improve their economy at the same time?

The hope is that this event will spur the government and the people to do two things- 1) come together as a nation and work together and 2) that having to rebuild their cities and lives that the people will invest in Japan and improve its economic situation.

On of the best sign that this will take place will be in the state of the Japanese gov. bonds. The majority of the Japanese debt is held by the Japanese themselves- either in the different banks or by the public in bonds.

Jeremy Lawson, an economist with the Institute of International Finance, a lobby group for global banks in Washington, agreed. The trajectory of Japan's debt is unsustainable, but, in the short term, "domestic residents may display even greater willingness to lend to the government as an act of national solidarity," Lawson said in a report.

"But out of this crisis affecting a large part of the population, a sense of 'public morality' is already building up," Hamasaki said. "If the country's leaders can harness this spirit in the long term, then I'm sure Japan will move in a positive direction."

This civic duty, an impulse of shared responsibility, is likely to count for more than any spreadsheet in trying to assess the impact on Japan's bond markets of financing the still unknowable bill of rebuilding after the quake, the strongest on record here.

The original article can be found HERE.

BBC reports on US Trade with China

It's interesting to see one country speculate on the trade between another two. In the article "US says China is working towards rebalancing its trade" the BBC shows a optimistic side and suggests that cooperation is going well between the two countries. The article quotes another article from The China Daily Newspaper-

"China understands they can no longer depend on demand from US consumption being such a substantial contributor to growth," Mr Geithner said during testimony to the US Senate Foreign Relations Committee.

"They have no alternative but to shift their growth strategy to a growth strategy that relies more on domestic demand," he added.

"They are moving in that direction but it can't happen unless they let their exchange rate move too."

I guess it's nice to see other countries learning to not depend on America so much. The original article can be found HERE.