The Alaska pipeline that was shutdown last Saturday was temporarily restarted last night. According to Alyeska Pipeline Corp, having the system down in below freezing temperatures increases the risk that something else could go wrong. Oil prices have risen 3.5% since the shutdown and oil is currently just over $91 a barrel.
As stated in our last email, we have zero expectation for OPEC to ease the pain at the pump, and in our opinion, they miss $100 oil. In a statement this morning from Iran’s OPEC governor, he stated that there is no reason to call an emergency meeting for $90 oil because the market was well-balanced and doesn’t need further supply. Yesterday, the Kuwait Oil Minister said that even if oil hit $100, OPEC would still not hold an emergency meeting. Again, they miss $100 oil as much as we miss $10 oil.
China, the world’s second largest economy is slowly making the yuan a global currency.
In the recent weeks and months, we have seen some decisions and announcements by China and others that paint a very clear picture of where the yuan is going.
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- Last year China and Russia agreed to do trade in their own currencies.
- Last summer McDonald’s sold nearly $30 million in yuan bonds to pay for new restaurants in China. Caterpillar sold $150 million in yuan bonds.
- Last month China increased the number of exporters who can use the yuan to settle transactions from a few hundred to almost 70,000.
- Last week the World Bank issued its first yuan bonds.
- Today, China launched trading in its currency in the U.S.
As we move into this decade, we believe we will see gold and the yuan rise in value against the dollar and in relevance. In a statement to the Wall Street Journal, Li Xiaojing, the general manager of the Bank of China (New York branch) said, [su_quote]We’re preparing for the day when renminbi becomes fully convertible. [/su_quote]So are we Mr. Xiaojing, so are we!