Oil, Airport Rents, China-US-Currency

The oil well has no bottom Sherry Cooper, Financial Post, April 08, 2005

Sherry Cooper is global economic strategist and executive vice-president, BMO Financial Group and chief economist of BMO Nesbitt Burns.

Much of the current debate regarding the future of commodity prices, particularly oil, hinges on the continued strength of the developing world. This, itself, is a presumption, and it may not be the sole or even primary determinant. To be sure, much of the rise in energy and non-energy commodity prices has reflected the surge in demand from the emerging markets and the inadequate and very-much lagged response of commodity suppliers. Resource prices were so low for so long, that many producers simply shut down or refrained from high-cost resource exploration or mining. It is only since oil moved well in excess of US$35 a barrel that many of the players in the Canadian oil sands have found it economically feasible to mine oil from bitumen. And they wouldn't be doing it now if they didn't expect oil prices to remain high for the indefinite future. Many, far more expert than I, suggest that global oil supplies will be increasingly inadequate in coming years.

[. . . . ] China is now the largest consumer of cement, iron ore, steel, aluminum, tungsten and coal. [. . . . ]

Search: the more the United States slows

But read on.





Pundits moving oil price goalposts -- Market looks frothy: 'Super-spike' target of US$105 looked like publicity stunt David Berman, Financial Post, April 08, 2005 (or Apr. 7.)

[. . . . ] "Investors are not discounting a possibility that growth could slow in the United States or China. They are extrapolating an expectation that the U.S. and China are going to continue to grow uninterrupted and indefinitely -- and that just won't be true," he said in an interview. [. . . . ]

Airport Rents

Cities urge Ottawa to cut airport rents -- 'Damaging' to economies Paul Vieira, Financial Post, April 09, 2005

[. . . . ] Mr. Miller said the principles behind the rent regime, introduced in the early 1990s when control of airports was spun off to local not-for-profit authorities, no longer apply. The government previously defended airport rent as a way for taxpayers to get a return on their investment.

"Almost all of the facilities that were here when Pearson was taken over by the GTAA [in the early 90s] are gone now, and replaced by upgraded facilities -- mostly paid for by travellers. So we are paying rent for not very much and we are entitled for a reduction," Mr. Miller argued

Just last week, I read that the national airline of India will be flying to Toronto direct. Check "Gerry Schwartz" and "airline" -- a vague memory of his buying into an airline but . . . so maybe rents are going to go down or cabotage will come between Canada and the US.






China says U.S. should fix own economic problems, stop targeting Beijing Stephanie Hoo, CP

BEIJING (AP) - Bristling at U.S. criticism of its tight currency controls, China said Thursday that Washington should instead improve its own financial discipline to ease its ballooning trade deficit.

[. . . . ] Washington contends the policy gives Chinese exporters an unfair price advantage, contributing to the mounting U.S. trade deficit with China, which hit $162 billion US last year.

On Thursday, the U.S. Congress for the second time in two days gave notice to both China and the Bush administration that it will take action if nothing is done about the currency. [. . . . ]