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Wednesday, April 20, 2011

Good things Aquino admin is doing..

I have been on Holiday for quite sometime and I have visited Barangays and farming communities in the eastern part of the Visayas. I have learned that more farmers today are upbeat and confident of the future due to the policies of the Aquino administration, although much more could be done.

1. Prices of copra. Around 60 to 70 per cent of people here have coconut farms. Prices have gone up from P14 to around P45 at farm level, and from P20 to P60 at city purchase level. This has effectively increased farmers income from coconuts hugely. Farmers are happy with the prices. The government could help them more with technologies to further increase their production levels. Technicians and agri-technologist are needed in communities to do technology transfer among other issues.

2. A program called "for peace" or something by the DSWD. Around 50 poorest families in every barangay are recipients. This would provide P600 per child per month. This is just WOW! Everyone is talking about it, and everyone is upbeat. It is limited to 2 kids per family of school age. I am just hoping this would not encourage having more babies among poor families just for sake of P600 assistance. The government must do this fairly and without corruption.

3. The P500 pesos a month per "senior citizen assistance.

These three things would greatly eradicate hunger in huge swaths of communities all over the country.

Great job going.


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Oil prices.

EVAT is extemely important for the government so it must not be touch. If the oil prices gets worse than it already is, then the government must think of doing something about it.

They could probably make EVAT in oil elastic. They could freeze the oil price at a price level, and the further increases charge to EVAT. Which means the price could be frozen up to levels of 12% equivalent of EVAT. This would look like this:

If current price is 50 per liter. The government earns P6 per liter from EVAT. If the government decide to freeze price levels at P50, then further increases could be charge to EVAT which would provide them a room of as much as P6 anticipated increases which further would equivalently reduces EVAT earnings on oil until it reaches P0. Further increases, the government should think about subsidizing it up to a certain amount.

The government recovers everything back when oil prices goes down below 50 per liter, but would still keep it frozen st P50 liter for a period of time until losses from EVAT, and its possible subsidy is recovered.

This is win win.

Thursday, April 07, 2011

Forex directions and tidbits

The broad selloff in the yen stalled early in Asia on Friday as investors took profit on short positions following a major aftershock in northeast Japan, while comments from the European Central Bank head saw the euro retreat from 14-month highs. The euro last traded just under $1.4300, having slipped to a low of $1.4240, down from a 14-month peak around $1.4350 set on Wednesday.

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The Australian Dollar was up against the Euro and down against the Japanese Yen, with EUR/AUD shedding 0.23% to hit 1.3696 and AUD/JPY falling 0.81% to hit 88.54. The Australian dollar has broken all expectations, gaining to the record its highest level against its U.S. counterpart since it began trading in 1983, while traders performed carry trades techniques, by which the yen is sold in favor of currencies that hold higher interest rates or other higher-yielding assets.

The Aussie has continued its gains against its US counterpart, recording a new record high at 1.0436.

As for the unemployment rate drop noted on the Australian currency, the AUD has witnessed a significant increase against the US dollar and other major currencies, with an increasing number of new jobs expected; indications to both growth and inflation in the Australian economy and thus increasing demand for the Australian currency.

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And now for both gold and silver:

Gold is at its highest with no end in sight. Silver price wayback in 2004 was around 6$ and now it is at crazy, I mean crazy levels with not downward in site at at 39$. At Ft.com:

The silver market is likely to continue its spectacular ascent and to touch a record high at more than $50 a troy ounce this year – but could then crash back to earth, according to new forecasts by GFMS, a leading precious metals consultancy.

The grey precious metal has soared 121 per cent during the past 12 months to touch a 31-year peak of $39.73 this week as investors, disillusioned at the actions of central banks and governments, bought it as an alternative to paper currencies.