Email of the day (2)
Comment of the Day

May 04 2012

Commentary by David Fuller

Email of the day (2)

More on Japan, particularly regarding immigration:
"It's complex issue, but my personal opinion is that were a future government to encourage large scale immigration as part of a long term growth plan, the Japanese public would not oppose it. I think most people are reasonably tolerant. The opposition LDP, in particular, have been opposed to immigration over the years, but I do not think their views necessarily reflect public opinion.

"However, I just don't think it's going to happen any time soon and certainly not in time to save the pension system. Incidentally, many younger people have been aware for years that they may not receive much in the way of a pension when they retire so they have saved more which has probably further hindered economic growth.

"By the way, on a different topic, this is an excellent interview:"

David Fuller's view Many thanks for your thoughts on this subject. Immigration is a controversial subject in most countries but I think homogeneity isolates populations. At its best it can preserve worthwhile traditions but at its worst it can narrow perspective and entrench prejudices.

I enjoy living in a pluralistic city, finding them more interesting culturally and generally more tolerant.

Thanks also for the interview with Ronald-Peter Stöferle, an analyst for whom Fullermoney has a high regard, interviewed by James Puplava: 'Higher Oil Prices Coming - OPEC Has "Nothing to Spare"'.

I have only had time to listen to half of this excellent interview to date but Ronald-Peter Stöferle clearly thinks that the risks of oil prices lie mainly in the short to medium term, if there are further supply disruptions of consequence, not least a bombing raid on Iran's nuclear facilities which he says would tip the global economy into recession.

I agree, and for this reason maintain that there is unlikely to be any significant attack on Iran this side of the US Presidential Election, and hopefully beyond. It would almost certainly prove to be a Pyrrhic victory for Israel and / or the USA. Meanwhile, I assume that there is little spare capacity within OPEC and demand for crude oil will most likely increase with the next Asian-led upturn for the global economy. This is why I have long maintained that the global economy is in the second consecutive decade of dangerously tight energy supplies.

However, I also maintain that for every day in which current oil supplies are not compromised by war, political unrest or serious accidents, brings us closer to a future of lower energy prices in real (inflation adjusted) terms. The biggest change is in the development of so-called non conventional shale oil and gas, and tight-oil, all of which are increasingly accessible due to advanced technologies enabling their extraction. Global reserves of shale oil and gas are enormous and development is expanding beyond the USA and Canada.

Simultaneously, we also have the ongoing development of renewable sources of energy. Additionally, China's modern nuclear reactors under development will reduce that country's dependence on imported oil. The Obama Administration-led global efforts to reduce speculative demand for oil are instrumental in the recent easing of upward pressure on Brent and WTI futures contracts. Fullermoney has long maintained that futures contracts for oil, other industrial commodities and foods were never intended to be an asset class.

(See also Eoin's comments on natural gas below.)

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