Japan wholesale inflation rate hits 7.1% in Jul 2008, a 27-year record high

Japan's wholesale inflation rate accelerated to a 27-year high in July, squeezing corporate profits, increasing bankruptcies and threatening the economy's longest postwar expansion. Producer prices, the costs companies pay for energy and raw materials, climbed 7.1% from a year earlier, the Bank of Japan said. More businesses failed because of rising fuel and raw material costs in the first half of this year than for all of 2007. "Even though oil prices have been coming down in recent weeks, companies will keep trying to raise prices because they've made up for only a fraction of the cost increases they've suffered," said Azusa Kato, an economist at BNP Paribas in Tokyo. Faster inflation is unlikely to prompt the Bank of Japan to raise interest rates as the economy teeters on the verge of its first recession since 2001.

- Now that's one economist who has got it right, as the impact of $100+ oil is still filtering through the global economy. Japan is a special and peculiar case for inflation watchers like myself, seeing how it has come off a decade-long period of deflation and its pendulum is undoubtedly starting to swing the other way again toward inflation. All you have to do is to look in Japan's direction to see what's in store : an increasingly inflationary future.

(2008-09-01 20:39:59 SGT) [Biz] Permalink

Malaysia Proton to develop hybrid car

channelnewsasia.com :

Malaysia's state-owned carmaker Proton is developing a new, fuel-efficient hybrid car to beat rising costs and address environmental concerns. Prime Minister Abdullah Ahmad Badawi told the state Bernama news agency he had already test-driven the car and urged the company to continue researching energy-saving technologies. "Such an effort by Proton will also assist the government in saving petrol and preserving the environment," the Star daily quoted him as saying. Proton was formed 25 years ago by former premier Mahathir Mohamad as part of an ambitious national industrialisation plan but its market share has slumped over the years, as it faced difficulties coping in a new deregulated market.

- An admirable effort, but one has to wonder whether they are up to the technical challenge, given how Toyota has had over a 10-year headstart, with the 2009 Toyota Prius looming, and the Honda Civic Hybrid is into the second generation as well. Techniques such as regenerative braking, hybrid drivetrains and battery management software are not developed overnight. One prototype test car does not a production-ready model make. They would need to do some heavy-duty partnering, but with whom would they partner with? I would be most intrigued to see the business case for such a pairing. Or perhaps they might try to do it all alone?

(2008-09-01 20:20:09 SGT) [Biz] Permalink

Vietnam inflation rate hits 27% in Jul 2008

channelnewsasia.com :

Vietnam's annual inflation rate hit 27% in July 2008 as rocketing food and fuel costs saddle its economy with one of Asia's toughest battles against rising prices. The price of the staple food rice and other grains was up 72.7%. With large oil reserves but no operating refinery, the country used 7.8 billion dollars to buy petroleum products, a rise of 90.7% amid record high global energy prices. The government's decision to hike retail petrol prices more than 30% is likely to push inflation still higher. Vietnam was once widely hailed as Asia's next economic tiger, but has been battered by double-digit inflation, a ballooning trade gap, tumbling share prices and worries about the banking sector and its currency, the dong.

- 27% inflation, that's certainly double-digit inflation, when all you need is to achieve double-digit is to hit 10%. So who else is in this exclusive "double-digit inflation country club"? We've got India which has gone over 10%, Venezuela has reportedly reached 33.7% also in July 2008, and of course we have Zimbabwe, the hyperinflationary poster child going at 2.2 million percent inflation as of the last official report. Honorable mentions include Thailand, which is closing in with its 9.2% inflation rate, China which reached 8.7% inflation back in Feb 2008, and even Singapore which hit 7.5% inflation in May 2008.

(2008-09-01 20:04:09 SGT) [Biz] Permalink

Norway crude oil exports likely to cease by 2030

peakoil.com -> bloomberg.com, e24.no :

Norway's oil production peaked in 2001 and exports are likely to end by 2030, Norwegian business Web site E24 reported, citing a study by Professor Kjell Aleklett at Uppsala University in Sweden. Production at larger oil fields in Norway has decreased by 13% a year, while annual output at other fields has slumped 40%, a rate of decline that's likely to accelerate, Aleklett told E24. Production should have been limited at 1 million to 2 million barrels of oil a day in 2001, instead of the 3.6 million barrels a day that was produced, Aleklett said - this would have extended production to 2050.

- If you are new to Peak Oil, or if you are wondering about that last part, it would be a good idea to get a copy of Matt Simmons' excellent book Twilight in the Desert, and read up how pushing an oil field to its maximum production limit will do irreversible damage to the field, and how deliberately slowing down crude oil output could help not only to conserve the reserves for future use, but also limit damage to the oil field and allow more recoverable reserves to be extracted over time.

The oil and gas fields in the North Sea are of considerable interest to the peakoiler community. They are vitally important to the economies of the countries who own and operate them, especially Norway and the UK. They are prime real-life examples of peak oil production occurring despite the best technology that can be, and has been thrown at them. The fact that they are in decline and are well on the way to running out completely within most people's lifetimes is of huge strategic import. And, due to this, the Europeans having to rely more and more on Russia for their energy needs makes for a very interesting geopolitical situation. "Interesting", of course, is used the same way as it is applied in the classic saying : "May you live in interesting times".

(2008-09-01 13:12:09 SGT) [Energy] Permalink

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