SAUDI ARABIA IS RUNNING OUT OF OIL-------By Shan Saeed

Saudi Arabia is running out of oil------By Shan Saeed, Riyadh's Hidden Energy Crisis: While the world wasn't watching, the Saudis have been covering up a huge secret...A secret so big and game-changing, they've gone to great lengths to keep it hidden. A secret that, when the rest of the world wakes up to its implications, will send massive ripples through the energy markets. For those bold enough to see the truth and act quickly, the opportunity it presents is immense. Saudi Arabia is running out of oil. You didn't read that wrong. It's not a joke, nor is it just my opinion. And I'm most certainly not crazy. It's a stone-cold fact. The report I'm talking about is from the world-renowned think tank Chatham House. I'm sure you didn't see anything in the media touting this report or anything about the Saudis running out of oil on the evening news.Don't take my word for it... Here's an excerpt of the report from Chatham House: " Saudi Arabia's energy consumption pattern is unsustainable...That means on a 'business as usual' trajectory, it would become a net oil importer in 2038." That's right. If the Saudis continue at their current rate of oil consumption, they will become net oil importers even sooner than they want to admit. And truthfully, I think we're looking at much sooner than 2030. Because it seems Saudi Arabia has developed quite a penchant for wasting the one thing the world covets most... How much do they waste? To be blunt, too much. We're talking about nearly three MILLION barrels PER DAY. That's a staggering number, for sure. But get this: That's more than 25% of their oil production. According to the International Energy Agency, the Saudis consume more oil than Germany, a country with 3x the population. Talk about waste! The Saudis use as much oil per person as people in USA do and it has a far higher car-to-person ratio. This is a great opportunity for smart and savvy investors to take position in the global energy market. USA will dictate the global energy market by producing more and more Oil and Natural gas and becoming the net exporter globally. Disclaimer: This is just a research piece and financial market insight. All financial transactions carry a RISK

Shan Saeed on Al Jazeera TV on Feb 6, 2013 with Sami Zaidan

ECONOMIC OUTLOOK FOR UNITED KINGDOM---By Shan Saeed

ECONOMIC OUTLOOK FOR UNITED KINGDOM---By Shan Saeed Bank of England--Main task The new Governor of the Bank will have unprecedented powers to direct and regulate the UK banking and monetary system. He will need to work closely with the government of the day, so that Bank policy is complementary to fiscal policy and to the government’s legislative priorities. He will need to shape and lead the team at the Bank to use the new powers wisely, in the national interest. He will need to decide what to do with the large QE program he inherits, and what to do about the malfunctioning banks still with large state shareholdings. Let see and hope the new Governor is someone with good judgement about the state of the UK economy and its position in the world. I suggest there are two crucial tests of an individual’s past judgement. Did they realise the Exchange Rate Mechanism would be damaging to the UK? Did they understand how tying the pound to the DM in the early days would lead to faster inflation, and then the opposite once the inflationary effects undermined confidence in sterling? And did they read the 2005-10 cycle correctly? Did they understand that credit and money was too loose in the period up to 2007, and did they understand that this was corrected too abruptly in 2007-8, jeopardising the liquidity and even the solvency of some banks? Did Mr Carney see the problems with ERM membership prior to the entry, and the dangers of DM shadowing. Did he think the previous policy of money targeting , as the German Central Bank did, was a safer way of controlling events? Did he argue for tighter monetary control with higher interest rates in the boom phase prior to 2007, and argue for a more rapid injection of liquidity in 2007-8? This approach should be allied to controlled administration for any bank that could not meet its obligations, is something that has now been adopted as policy for future crises. Clearly when he took over as Canada’s Central Bank Governor he did understand the need for easier money. Lets see what he has studied the unhappy monetary history of the UK and formed the right conclusions from the torrid and bumpy ride the Establishment gives UK, both through its espousal of the ERM and its encouragement of Boom/Bust in the noughties. Today the priority is to assist the government in its wish to promote faster growth. This in turn will help bring the budget deficit down. The Bank needs to relax immediate controls over bank capital and cash, whilst maintaining a more prudent level than in the period prior to 2007 to assist the recovery. There will be time to demand higher levels of cash and capital once the recovery is under way and as banks generate better profits. The Bank also needs to ensure its current policies of QE and Funding for lending are well designed to maximise the beneficial impact of these extraordinary interventions. The US and the UK – different approaches to fiscal stimulus RBS published some interesting figures on the US. Over the last twelve quarters US public spending has fallen in ten of them, making a total decline of 6% over the period. Despite or because of this tightening of the spending stance, the US economy has grown overall by 4.8%. In the UK the last eleven quarters (since the Coalition arrived) have seen a significant rise in real public spending but only a 0.4% increase in output. In most quarters in the UK the public sector has made a positive contribution to output growth. Those who argue the US has grown faster because Mr Obama has avoided austerity whilst the Coalition has gone for it should look again at the figures. Mr Obama has not increased Federal spending by sufficient to offset state spending declines, so the US has been much tougher on public spending overall than has the UK. Why haven’t the US cuts in spending led to economic decline, as some argue here. Some points to ponder upon.

Shan Saeed comments on Al Jazeera TV on Jan 9, 2013

US DOLLAR DETHRONED, CHINA'S NEW GAME PLAN---By Shan Saeed

U.S. Dollar Dethroned. China new game plan-----By Shan Saeed

Welcome to China. Enter the new great country called China. China holds more U.S. government debt than any other country in the world. They currently hold more than one trillion U.S. dollars. Beginning in 2007, China began to get worried.

What if the U.S. collapsed? What if dollars suddenly became worthless? Could they really afford to hold onto $1 trillion forever? If China was worried in 2007, they were downright panicky in late 2008, as it seemed a total financial collapse was imminent in America.

China held massive amounts of U.S. dollars, but they couldn’t sell them without causing a huge drop in the dollar’s value. What’s more, China still needed dollars to buy oil. Yet, China understood it was extremely risky to continue buying and holding dollars, so they began to diversify by buying up massive amounts of GOLD and other precious metals like SILVER. China bought 520 tons of gold in 2011—twice the amount they bought in 2010.

And their gold-buying binge doesn’t seem to be letting up any time soon. In the first six months of 2012, they’ve already bought 383 tons of gold. At that pace, they’d acquire 766 tons of gold by the end of 2012. More importantly, China is following in Iraq’s footsteps. Just as Iraq had planned to trade oil in euros, China began to explore the idea of bypassing the dollar by trading oil directly with oil-producing countries.

You see, while the U.S. was willing to attack a small country like Iraq, I don’t see any way that the U.S. would attack a country as large and powerful as China, especially when you consider that China produces most of the consumer products purchased in the U.S. However, USA is trying to play games in South China Sea through Australia, Japan and Philippines. USA has stationed 2500 troops in Australia and Naval ships in Philippines.  I have shared this with Pk Biz, Philip Sigglekow, Rola Ezzedine,Umaer Abid, Kate Otto Swann and Shaun Rein.

CHINA AND RUSSIA'S NEW GAME PLAN FOR THE MARKET

Let me be clear: China’s plans are no longer just plans. They are now reality. As of October 2012, China and Russia reached an agreement and formally announced that they would begin trading oil directly. Russia will provide oil to China, and China will pay for the oil—not with U.S. dollars—but with yuan. By trading directly with oil-producing countries, China would then be able to off-load dollars before they became worthless—and still have access to as much oil as they want.

While this announcement has not been widely publicized or came in the main stream newspapers LIKE Wall Street Paper, Financial Times, New York times or Washington post, it spells the end of the petrodollar. In other words, the U.S. dollar is the world’s reserve currency in name only for the next 25 to 30 years . Now that China and Russia have abandoned the petrodollar, other countries like Iran, India, Argentina, Jordan, South Korea, Venezuela, Luxembourg and Brazil are expected to soon follow China’s lead. And there is nothing the United States can do to stop it!... But it will get pretty severe going forward.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK.

PAKISTAN ECONOMIC OUTLOOK FOR 2013----By Shan Saeed

PAKISTAN ECONOMIC OUTLOOK FOR 2013----By Shan Saeed

ECONOMY

Pakistan economy will continue to remain in un-chattered waters due to political uncertainty, militancy, growing fear of unpredictable policies of the PPP government. 

GDP will stand at 3.2% by June 30, 2013. 

Fiscal deficit will remain 6.5% of GDP. 

Inflation will hover around 10% . 

Foreign exchange reserves will be $14 billion, 

Remittance will kiss $ 13 billion

COMMODITIES

Due to global upsurge in demand of commodities, Pakistan being the agriculture based economy will benefit from the international commodities boom. SUGAR, RICE, COTTON , WHEAT will benefit from rise in prices

CURRENCY

Due to election year,political and economic turmoil will keep the Pak Rs under pressure against USD. However, if Pk Rs does appreciate against USD it would be due to QE4 launched by the FED to keep the USD lower globally. Pak RS will stand at 98.5 against USD on June 30, 2013

PAK RUPEES OUTLOOK FOR 2013

There are 7 variable making an impact on Pak Rupees in 2013

A.    ELECTION YEAR

This year heralds an economic change whereby government will hold elections under the supervision of army and independent Election Commission of Pakistan. Most parties will get their funding from abroad and lobbies working locally. This election will be the bloodiest elections in the history of Pakistan. So most of the spending will happen in Pak Rupees and supply of PKR will be more in the market.DEMAND SIDE FOR PAK RUPEES

B.     POLITICAL TURMOIL

This economy is going through lot of hiccups and instability, fear and uncertainty, this will make entrepreneurs and people think to keep their savings in DOLLAR OR Canadian Dollar OR Gold. Political instability will have NEGATIVE impact on Pak rupees thus keeping money in FOREIGN CURRENCY attractive and rationale. DEMAND SIDE FOR FOREIGN CURRENCY

C.    REMITTANCES

The global economy is getting messier as Europe is deep in recession and US is struggling to come to terms with fiscal cliff i.e. raising taxes and reducing spending and deliberation of Debt ceiling continues. Many Pakistanis are sending their saving back home to avoid losing their funds in European and American banks. Swiss secrecy laws are outdated and authorities are sharing data with various countries as per their jurisdiction requirement. Most Pakistani will be routing their funds back to Pakistan for other destinations including Dubai, Kuala Lumpur, Singapore, Hong Kong, London and Luxembourg. DEMAND SIDE FOR PAK RUPEES

D.    COALITION SUPPORT FUND

Pakistan is expected to get some inflows from the War of Terror support money. This will increase the Dollar inflow in the country. $700 million^ was expected. DEMAND SIDE FOR PAK RUPEES

E.     IMF DEBT PAYMENT

Pakistan need to make debt payment during the first quarter of 2013. This will put little pressure on PAK rupees since Dollar outflow will happen to meet the debt payment requirement. More than $800 million^ to be paid.  DEMAND SIDE FOR FOREIGN CURRENCY

F.      OIL PAYMENT

Pakistan imports huge quantity of oil to meet her domestic requirement. OIL payment needs to be made to keep the oil supplies running to meet the domestic demand. DEMAND SIDE FOR FOREIGN CURRENCY

G.    REGIONS IMPACT ON THE PAKISTAN EXPORT

Since our neighboring country India is witnessing a slower growth, she will continue to keep her currency and interest rates low in line with international STRUCTURED DEPRECIATION of currencies. Many countries globally are keeping low interest rates to boost domestic economy, increase exports, keep the growth momentum going in order to bring structural changes to move on the growth trajectory with sustainable economic returns for their people. DEMAND SIDE FOR PAK RUPEES.

NUTSHELL

In view of the above 7 variables, Pak Rupees will remain choppy in line with the strategies adopted by various countries of STRUCTURED DEPRECIATION to boost exports in the short run to compete with the region. SBP will supply more Dollars to keep the Pak Rupees away from a free fall. There could be capital controls imposed if the economy deteriorates if election results are not fair. Strikes, social unrest and anarchy situation cant be ruled out. CAUTION IS THE WORD FOR INVESTORS

CHINA STRATEGIC ENERGY GAME PLAN---By Shan Saeed

CHINA'S STRATEGIC ENERGY GAME PLAN----By Shan Saeed

A REAL ALL OF THE ABOVE ENERGY PLAN-----INSIDE STORY.

China accounts for more than 20% of the world's global energy demand. As it is known, the Middle Kingdom surpassed the U.S. to become the world's biggest energy consumer in 2009. Today the race is still neck and neck. And if the market has grave concerns over slower growth in China, somebody might want to tell China that..China's growth is the main reason the country is so interested in securing its future energy supplies. Luckily, China's real targets are much closer to home. It was seen how quickly they were catching up to U.S. oil consumption.

CHINA TO DUMB OPEC
Do you think China is dumb enough to trust in OPEC to keep them well supplied? Can Chinese really expect them to continue getting gouged by Russian fuel exports? The answer to both these questions is a resounding 'No.'
China's Energy Race Heats Up: To say that China is buying up the future energy supplies would be a gross understatement. Over the last few years, I have seen this time and again through their strong merger and acquisition activities. Things are heating up with two of China's latest deals: CNOOC's $15.1 billion buyout of Nexen and Sinopec shelling out $1.5 billion for Talisman Energy's stake in the North Sea. Hey, if you can't beat 'em, just throw a lot of money around.  What's interesting here isn't so much the amount of cash that China spent, but rather where they're spending it... Not only are they dishing out billions of dollars in the North American shale boom — but they're more than willing to go anywhere for these resources. In one fell swoop, CNOOC picked up operations in the North Sea (Nexen was one of the leading producers in the UK North Sea), the Canadian oil sands, and the rich shale gas resources in British Columbia. I have known for a long time this deal was in the making. China's newly acquired operations in British Columbia's Horn River Basin is a precursor for the LNG exports that will soon be sent across the Pacific. So, what's next on China's agenda? China will secure South China Sea for gas discovery.

OIL OFF THE RADAR.
Here's a little-known fact about these buyouts: Sometimes it's not just the new oil fields the buyers are after. Truth is the Chinese are also benefiting by gaining access to the technology being used to reach these new oil resources. Take their interest in the various U.S. shale plays, for instance. The real prize isn't production, but rather learning how to extract the oil and gas from the shale formations.
It is no coincidence the Chinese are spending billions of dollars here while trillions of cubic feet of natural gas lie trapped in Asian soil. The next leg of this energy race may not come from new, huge oil field discoveries — but rather from pumping oil it is already known to be there. Don't forget that conventional drilling methods can only produce a small percentage of the total resource. (In the United States alone, there's an estimated 430 billion barrels that are still obtainable.)

CHINA IS HUNGRY FOR SHALE GAS
China's huge thirst for shale gas, a new way to transport gas. Why the U.S. will remain the top spot for shale…China's thirst for natural gas around the world continues unabated. As I have shared before… the U.S. is producing incredible volumes of natural gas… Once she starts exporting her massive new supplies, the market for natural gas will become a global one – with consistent global prices – just like the oil market. And it looks like China will become one of the largest customers. China's liquefied natural gas (LNG) imports could make up 35% of its needs by 2015.

According to contracts already in place, China could purchase as much as 93 billion cubic meters (bcm) of natural gas in 2015. China's economic planning agency, the National Development and Reform Commission (NDRC), estimates the country's domestic production will equal 176 bcm by the same year. [That number is likely high, more on than reported). The NDRC says consumption will increase 20 bcm every year to 230 bcm by 2015.

Natural gas represents only 4.6% of China's current energy consumption. That is far below the global average of 24%. China's government has pledged to increase the natural gas share to 10% by the year 2020. Through the end of Mid November [the most recent available figures]… China had spent $6.9 billion on gas supplies via pipeline from Turkmenistan and Uzbekistan. It spent another $6.6 billion on LNG shipments – the majority of which arrives from Qatar and Australia.

And a report from petroleum giant BP estimates China accounted for around 22% of Asia-Pacific gas consumption and about 4% of global demand. China's demand for natural gas will grow to massive proportions over the coming decades. And it's not the only Asian giant with a thirst for gas… India is the second-most populous country on the planet. Today, gas only makes up 7% of its energy consumption. (Again, the global average is 24%.) And India only produces about one-third of what it consumes.

The biggest boon for China will be the technology to produce the billions of barrels that are currently unattainable using today's techniques...Just imagine what will happen when China catches wind of this technology and starts digging around in its deep pockets of Asia, East Africa and USA. Happy investing with Chinese oil companies. I am bullish on China's energy needs.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry risk.