Now that the Olympic games in China are over, the next major sporting event in the world will be the FIFA World Cup in 2010 to be held here in South Africa. All eyes will be on South Africa, not only in the build up to the event but also after the event. A lot of money and resources are being put into this world show piece event. Some have said, too much money is being spent by the government for an event that will only last one month. A question you hear being banded around a lot these days is, “What will happen after 2010?”

Jason Simpkins from Money Morning takes a look at the China economy during the Olympics games below. Maybe we can see how the Olympics affected China and see if the same will happen in 2010 in South Africa : Read the rest of this entry »

Oil prices have plummeted 24% from the record high levels achieved in July, but the sell-off that sparked a stock-market rally over the last four weeks may not last since the Organization of Petroleum Exporting Countries (OPEC) is already gearing up to cut production.

OPEC, the cartel that controls roughly 40% of the world’s oil supply, pushed its production to the highest level in its 48-year history in July after being criticized for doing too little as the oil bull went on a year-long rampage – causing oil prices to reach an all-time high of $147.27 on July 11.

The production increase was led by Saudi Arabia, which – after a visit from U.S. President George W. Bush – boosted its production from 9.4 million barrels per day (bpd) to 9.7 million bpd, the highest level in 30 years. Higher production from Iran also helped push OPEC’s total output to 32.8 million bpd. Read the rest of this entry »

With sky-high growth potential, China and India are the two markets no investor can afford to miss out on. But that doesn’t mean they’re impervious to market turbulence, and in times of trouble, India is the more reliable investment.

No doubt, both countries’ markets are suffering this year, with China’s Shanghai A Index down 50%, and India’s Sensex Index down 25%. It’s no secret that India is struggling with both a growing budget deficit and mounting inflationary pressure. But China has problems too – it’s just hiding them under the carpet until the Olympics are over.

That’s why, for me at least, the investment decision is clear – I’ll buy the country whose problems are out in the open and already reflected in stock prices. Read the rest of this entry »

Crude oil prices slipped below $119 a barrel on the New York Mercantile Exchange yesterday (Monday) for the first time in three months as tropical storm Edouard veered away from energy facilities in the Gulf of Mexico, and a government survey that revealed U.S. consumer spending flagged in June.

Light, sweet crude for September delivery tumbled $3.69 to settle at $121.41 a barrel yesterday, after earlier dropping below $119 a barrel for the first time since May.

Part of the reason for the decline was that tropical storm Edouard lost strength and turned westward to miss vital oil facilities in the Gulf of Mexico, but declining demand is probably the biggest figure in oil’s slump. Crude fell 11% in July after more than doubling in price over the 12 months prior. Read the rest of this entry »

It is no secret that we face an electricity crisis in South Africa. Eskom have just not been able to cope with the increase in demand of electricity due to the growing economy. The government and Eskom are trying to find a solution to the electricity crisis. There are suggestions that new power plants have to be built over the next couple of years and more coal will need to be secured inorder to power these plants. Funding for this expansion has not been easy as consumers seem to be the main contributors to the funding with electricity tariffs set to rise.

There have been calls by many to find alternative means of power to help increase the supply of electricity in South Africa. Many wonder why there has not been a major drive to start using more and more solar power. After all, we are in South Africa where we get a lot of sun shine through out the year. There are many countries in Europe using solar energy and they do not get as much sun shine as we do in South Africa. The cost of setting up the solar power infrastructure is relatively high but it would be a good long term investment. Read the rest of this entry »

Oil’s recent wild ride has some market experts questioning which way black gold is headed in the weeks, months, and even years ahead.

Oil dropped over 11% during a volatile week of trading, as reduced consumer demand put downward pressure on the once hot commodity. Crude oil for August delivery ended the week at $128.88, its lowest level since June 5 and well off its July 11 peak of over $147 a barrel.

“If this is not the [crude oil] bubble’s implosion, than it’s a reasonable facsimile,” analyst and trader Stephen Schork said in his daily market commentary, the Associated Press reported. “Perhaps all we have witnessed was a replay of last August’s subprime induced sell-off. Time will tell.
Nevertheless, for the time being we no longer care to hold a bullish view.” Read the rest of this entry »

As South Africa continues to battle against the rising inflation, it is worth noting that it is not only South Africa facing higher food and energy prices but larger economies such as the US are also battling inflation as is noted below by Jason Simpkins:

Consumer spending, which accounts for more than 70% of the economy, will be seriously threatened in the months ahead, as prices continue to rise, wages plateau, and government stimulus checks wear thin.

Consumer spending has remained strong in recent months, even jumping 0.8% in the month of May. But that boost was largely inflated by the $50 billion in government rebate checks that were cashed and put to use in the month. Read the rest of this entry »