Independent E.G.

Buying Airlines as a Gold and Silver Hedge

What you see on surface is not what things really are under deep water. You are right in realising nothing last forever. What goes up has to go down! Same for gold and oil especially when you check the volume traded under the price jump. The volume is not there to indicate a demand. "The demand is not there." The OPEC spokesperson is saying that over and over when denying the need to raise production. George Soro and Warren Buffet are calling this oil price a "bubble", would that ring a bell? So the question is how long will this bubble last? It's easy to say nobody knows. But if it affects our economy, we need to take action to end it sooner. From the surface, we can see airlines use a lot of fuel. But we know it doesn't stop there. People pump gas into their cars everyday. So the auto industry. Actually, the whole transportation industry as whole. So why Mr. Buffet is betting on railroads? Because railroads use less oil or no oil-dependent energy. What about trucking companies, and shipping companies? They're hurt but not many got into headlines like the airlines. Cars made are getting smaller and with alternative energies. Airlines are merging and getting smaller. Is that the force behind the volatility? You bet! There's a deadline for the mergers to go through. Some has a shot, some don't. The new administration will have new procedures. The lame-duck's clock is ticking. Those merger-hopefuls don't want to pay a high price and don't really mind low share prices (and they all pay hedged fuel price anyway.) Those who cannot meet the deadline (six months at least) are making whatever they can to make it harder for their merging competitors but it seems that there're too many downward pressure since people who are leaving airlines general sell their shares which drives stocks down and many claim-holders cash in their shares plus shorters who are betting that the oil bubble will last longer. That's the danger for the shorters who are betting on bubble. Right now G8+3 is being held in St. Petersburg. Together the World's major nations/consumers will focus on OIL price issue and act together. Last time, it was Reagan's administration alone. This time: It's the WORLD acting together! Be aware: whoever is cooking the oil price.