Washington, DC, United States (AHN) – Latin American finance ministers are trying to shield their countries from disaster amid predictions U.S. government budget cutbacks could hurt the region’s economies.

Economic ministers from the 11-nation Unasur organization met last week in Buenos Aires, Argentina, to discuss defensive strategies. They are working on an agreement that would create a roughly $12 billion emergency fund to bail out collapsing economies.

They also seek to reduce their dependence on the U.S. dollar for international trade and to develop policies to balance their trade deficits.

Unasur consists of Brazil, Colombia, Bolivia, Chile, Ecuador, Guyana, Paraguay, Peru, Surinam, Uruguay and Venezuela.

So far, Latin America’s economy has avoided the worst of the economic collapses in the United States and Europe that began in 2008 with a stock market collapse and recession. A brief drop in commodities prices along with government spending programs that shored up declining industries helped them avoid the worst of the crisis. However, economists predict the resilience of Latin American economies will not last much longer.

South American economies grew at an average of 6.6 percent last year, according to the International Monetary Fund.The Fund’s economists predict growth will slow to 4.7 percent this year and 4.1 percent in 2012.

By comparison, U.S. economic growth this year is running at 2 percent. Some European countries are showing no growth.

Stock markets in Latin American countries fell as much as 15 percent last week on news the credit rating service Standard & Poor’s downgraded the U.S. credit rating to double-A plus from triple-A.

Augusto de la Torre, the World Bank’s chief economist for Latin America and the Caribbean, said this week the outlook for Latin America is uncertain as concerns grow about another crisis for the United States and Europe.

China could be the next to falter as Western markets dry up for their manufactured products, he said.

“If China has a hard landing, that will hit us hard,” de la Torre told the Peruvian news media during an economic meeting.

Unasur leaders are exploring options to increase trade with China as its Western markets for manufactured products fizzle.

Protecting the economy is a major campaign issue in Argentina, where current president Cristina Fernandez won a landslide victory in primary elections this week.

She said at a press conference after the primaries that keeping Argentina’s economy strong would be a top priority for her if she is re-elected in October.

Low-income persons are most likely to be hurt by U.S. budget cuts that could reverberate around the world, including Argentina, she said.

Wall Street economists warn that her policies of price controls and using central bank reserves to pay debts could backfire for South America’s third largest economy.

The policies strengthen government control but depress market forces that help to balance the economy, according to some economists.

Argentina’s inflation rate is running close to 25 percent.

Other economic concerns are arising in Brazil, where inexpensive imported products are hurting the domestic manufacturing industry.

Chile and Peru still have stable economies as investors try to protect their assets by purchasing gold and copper, but economists predict declines in the precious metals market.

A decrease in demand for oil is depressing the economies of Venezuela and Mexico.

View full post on Foreign Exchange Market Stories

View full post on ACCOUNT NOTICE

Sydney, Australia (AHN) – The Australian dollar continued to surge higher in currency trading on Thursday reaching an all-time high in value against the U.S. dollar.

Trading saw the Australian dollar reach $1.0764 against the dollar with predictions it will climb to $1.10.

The $1.0764 figure was the highest value against the U.S. dollar that the Australian dollar has reached since it was allowed to float in value in 1983.

Trading has pushed the Australian dollar up 10 cents in currency pair trading against the dollar since mid-March.

In the meantime, the U.S. dollar has fallen in value against most of the world’s major currencies since Wednesday when Standard and Poor’s issued a warning on U.S. government debt being too high.

View full post on Foreign Exchange Market Stories

View full post on All Stories

View full post on All Stories

Irving, TX, United States (AHN) – ExxonMobil announced that it struck oil in the Gulf of Mexico with a potential yield of 700 million barrels. Aside from oil, ExxonMobil also found natural gas in its first deep water exploration after the moratorium placed by the U.S. government.

ExxonMobil President Steve Greenlee said on Wednesday that the oil find is one of the largest discoveries in the Gulf in the last 10 years. ExxonMobil spent $7.8 billion in the first quarter of 2011 developing new energy supplies.

An oil trader commented that ExxonMobil’s new discovery would provide sufficient oil to power the country for 28 days. The trader’s estimate is based on a daily consumption of 25 million barrels of oil.

While it is not the solution to the U.S. long-term demand for crude, the ExxonMobil find will likewise not create an impact on world oil supply and consumption.

Global use is 72 million barrels of crude oil daily. The ExxonMobil discovery could power the world for only 10 days, an industry expert reckoned.

However, it would definitely boost further ExxonMobil’s profits. The exploration firm registered profits of $10.7 billion last year. The 69 percent rise in profit is partly due to higher world oil prices. The soaring profits translated into $7 billion Q1 dividends for ExxonMobil stockholders.

View full post on All Stories

View full post on Commodities Stories

View full post on Commodities Stories

Riyadh, Saudi Arabia (TML) – Being a Saudi soccer fan is no fun these days. The reason has little to do with the players’ sportsmanship, but with the abuses fans have been forced to put up with in recent matches in Iran. “Death to Saudi Arabia,” shouted the Iranian fans during a game between the Iranian club of Piroozi and the Saudi club of Al-Ittihad May 3, as they tried to burn a Saudi flag.

On both sides of the Gulf – a body of water whose name is even a source of contention with a debate on whether it should be the Persian or Arab Gulf – tensions have risen both in the corridors of power and on the street. But rather than being defined as a struggle over national interests, both sides are determined to cast in religious terms – another chapter in a thousand-year-old contest between the Sunni and Shiite branches if Islam. And, unlike in the past, both sides are ready to talk about it openly, thereby fanning the flames.

“Arab Gulf countries have been concerned about Iran’s hegemonic plans for some time, but as a result of the Bahrain situation some of that fear has come to the fore in openly hostile rhetoric,” Salman Sheikh, director of the Brookings Doha Center, a Qatar-based think tank, told The Media Line.

The war of words in the Gulf is filled with risk for the West. The region contains the world’s biggest reserves of oil and Iran is believed by the U.S. and Europe to be developing nuclear weapons to enhance its power. The U.S. has troops in Iraq and the U.S. Navy Fifth Fleet is based in Bahrain.

The issue that enraged the Iranian fans was Bahrain, a tiny island kingdom situated just off the eastern coast of Saudi Arabia – a potential tinderbox where Sunni and Shiites live side by side in a country adjacent to some of the world’s biggest oil fields.

With an estimated 70% Shiite majority, but ruled by the Sunni Al-Khalifah dynasty, unrest erupted in the kingdom in February. The protestors demand political reforms and an end to discrimination, but in the eyes of the government and Sunni minority the rioters quickly revealed their sectarian nature.

Blaming Iran for sparking the unrest, King Hamed Al Khalifah, summoned Saudi and United Arab Emirates forces to quell the uprising in March, enraging Shiite Iran and failing to end the sectarian dispute. Dialogue between government and opposition broke down, and on May 17 seven Shiite parliament members from the Al-Wefaq party tendered their resignation, joining eleven Shiite colleagues who left parliament in March.

But the violence on the Iranian soccer court only expressed what many Gulf Arabs regard as Iran’s deep-seeded animosity to Arab culture. And now Arabs across the Gulf are starting to fight back.

Sectarian tensions have even spilled over into places like Kuwait, which traditionally enjoyed good inter-communal relations.

Three Kuwaiti Sunni Islamist lawmakers petitioned last month to question Prime Minister Sheikh Nasser Al-Sabah, barely two weeks into the tenure of his new government. A local version of a non-confidence vote, the question was titled “the damage caused to Kuwait’s national security as a result of his government’s foreign policy alignment with the Iranian regime.”

The move followed a visit by Iranian Foreign Minister Ali Akbar Salehi to Kuwait on May 18. Salehi was trying to calm Kuwaitis after an alleged Iranian spy chain was exposed in Kuwait. Two Iranians and a Kuwaiti were sentenced to death for forming the cell, reportedly associated with Iran’s Revolutionary Guards. Senior Iranian diplomats, including the ambassador, were banished from Kuwait.

“Loyalty to Arab land … is the common denominator defining the identity of the Gulf Arab, in spite of those who do not call it ‘the Arab Gulf’,” wrote Abd Al-Latif Al-Atiqi in an editorial in the Kuwaiti daily Al-Qabs on May 23, referring to the age-old dispute between Iran and the Arab world on the correct name for ‘the Gulf’.

“I have lived in Iran for 40 days and I speak some Persian. When watching a play in Teheran I witnessed all too well their deep hatred for everything Arab. I will not forget it my entire life,” Al-Atiqi wrote.

Sheikh warned that the failure to politically resolve the social unrest in Bahrain could lead to an open confrontation between Iran and Arab Gulf states.

“I’m worried that if the situation isn’t handled carefully, it could spin out of control,” Sheikh said, adding that even military confrontation could be imminent – stimulated by a host of unresolved political issues. Among those are a territorial dispute between the United Arab Emirates (UAE) and Iran over the tiny Gulf Islands of Abu-Mousa, Greater Tunb and Lesser Tunb, which were allegedly illegally occupied by Iran in November 1971.

The political body spearheading the fight against what it dubs “Iranian expansionism” is the Gulf Cooperation Council (GCC). Established in 1981 by six Gulf countries: Kuwait, Bahrain, Saudi Arabia. Qatar, UAE and Oman, the GCC set out to contain the increasing Iranian influence in the Arab Gulf both economically and militarily. The Peninsula Shield Force, led by Saudi Arabia and deployed in Bahrain in March to quash Shiite-led anti government protests, was the GCC’s first tour de force in years.

GCC foreign ministers, traditionally cautious about arousing the Arab-Iranian tension, have broken their silence on Iran in recent months. In early March they condemned Iran’s “blatant” interference in Kuwait’s affairs after the spy chain was revealed. In April, the GCC condemned Iran again, saying the Iranian actions “aimed at destabilizing national security and spreading division and sectarian strife in GCC countries.”

Abdullah Al-Shayji, head of the political science department at Kuwait University, says Kuwaitis were growing increasingly wary of Iranian ambitions in the Gulf.

“We are in the midst of a cold war with Iran,” he says.

“There is widespread belief among many Kuwaitis that Iran is causing a lot of mischief in the area,” Al-Shayji told The Media Line. “It has supported the Syrian regime in its repression of its own people, as well as many non-state actors.”

Al-Shayji noted that the GCC foreign ministers have met four times recently to discuss Iran, using harsher language than ever before. But he says the cold war with Iran was unlikely to deteriorate into a full-fledged military conflict.

“The Iranians are smart, they won’t directly fight but rather continue to use their proxies in the region,” Al-Shayji says.

However, the Arab Gulf is investing a whopping $120 billion in military purchases, including advanced fighter planes and anti-missile defence systems over the coming years, indicating that military engagement with Iran is a very real scenario.

 

View full post on All Stories

London, England, United Kingdom (AHN) – Britain’s Labour Party called on Chancellor George Osborne to curb the coalition spending cuts because of the economic slowdown the austerity measures caused.

The party cited the major dip in manufacturing and mortgage approvals as proofs of the threat of a double-dip recession. Britain’s purchasing managers’ index went down to 52.1 in May from 54.4 in April. The May figure is the weakest month in about two years, which indicates modest expansion only by the manufacturing sector.

For April, the Bank of England reported that mortgage approvals went down to a four-month low, amid a dip in business lending. Mortgage approvals decreased to 45,166 while consumer credit went up by only $750 million (GBP 500 million).

With these weak figures, the British Chambers of Commerce cut its growth forecast for the U.K. The chamber downgraded on Wednesday its outlook for 2011 to a 1.3 percent growth from 1.4 percent, and 2.2 percent from 2.3 percent for 2012.

In the same week, the Organization for Economic Cooperation and Development cut its 2011 growth forecast for Britain to 1.4 percent from 1.5 percent. The two forecasts are much lower than the 1.7 percent projection by Britain’s Office for Budget Responsibility.

While BCC lowered its growth forecast, the chamber increased its forecast for the country’s inflation rate to 4.5 percent this year from 4.2 percent in March. The BCC predicts unemployment will go up by about 150,000 for the next 15 months.

The BCC explained its revised outlook to inflation and the coalition government’s austerity program.

However, not all the declines were because of the coalition government’s spending cuts. Some of its are because of an extra bank holiday in April and the impact of the Japanese industrial shutdown after the March 11 earthquake.

View full post on All Stories