Jim K.

Are We out of the Deflation Woods Yet?

Francis: your comment is factually incorrect. Inflation and deflation are defined by govt. economists as increases or decreases in the level of consumer prices. Inflation is not defined as an increase in the money supply despite the belief of Friedmanites that inflation is caused by an increase in the money supply. Friedman's full formula includes both money supply and velocity of money - which might account for prices failing to rise despite higher money supply.

Incidentally, today's FT reported that German consumer prices fell by .1% last month, the first fall in over 20 years. The phenomenon was described in the FT as "negative inflation".

Are We out of the Deflation Woods Yet?

Francis: I believe your comment is factually incorrect. Economists define inflation as a rise in price. Period. Rising money supply is not inflation even though Friedmanites believe it is so closely tied to inflation that it's virtually the same. It's not. Friedman's full formula for inflation includes both the money supply and the velocity of money. Perhaps we see signs of deflation at a time of rising money supply because of weak velocity.

Incidentally, today's FT carried a report that German prices fell for the first time in 20 years. Consumer prices in Germany fell .1% last month vs. the prior year. The phenomenon was described in the FT as "negative inflation".

Oil Is Years Away from a Meaningful Recovery

Perry: what's your evidence on Ghawar?

Are Stocks and Oil Bottoming?

Mr. Cowie wrote: "Does anyone think our politicians have the will (or even ability) to balance the budget? Can a fish walk on dry land? That's why it's scary."

I believe Mr. Bush II inherited a budget surplus in 2001, achieved with much effort by Mr. Clinton.

The Long Case for Canadian Oil Sands Trust

In a recent interview posted on my web site the CEO of COS stated that all of the oil sands operations in total use less than 1% of the water of the Athabasca River. He also reported that his company recently got the first certificate for land reclamation, saying you would never know there had ever been a mine there.

In essence the oil sands operators are "borrowing" the land for a relatively short period of time. They promises - and are delivering - to put it back in "like new" condition when they are finished. If govt. does their job, these claims will be fulfilled.

Here is the full interview: www.energyinvestmentst.../

USO Short Interest Ratio

"OR a company like Gazprom will step to the plate and offer to buy All of the oil/gas produced by an entire Country."

Such as Libya. See today's news.