Navtej Kohli Business Blog

Navtej Kohli found an interesting piece of news. Are gold prices really heading towards a record high?

 As oil price is rising and dollar declining, gold has climbed back over $900. But there’s not much more headroom.

Gold, which typically rises during times of economic uncertainty and inflation, hit an all-time high of more than $1,030 an ounce back in mid-March.

The price started to slip soon after that as credit crunch fears subsided. But it has been back on the rise this week partly due to the dollar’s weakness and stubbornly high oil prices.

A week ago, gold futures were trading at $866 an ounce. Today, they hit nearly $909 in mid-morning trading. That’s a 5% jump in just a couple of days.

A bundle of sticks

Navtej Kohli says the best lessons in life comes through mistakes and personal experience. Here on Navtej Kohli Business Blog, he reminds us of an old story signifying the importance of unity.

Once upon a time, a father and his family of Sons lived in a village. The sons were forever quarreling among themselves, never paying heed to whatever their father said. Tired of this daily tension, he decided to taught his sons a lifetime lesson. He cast about in his mind for some very striking example that should make them see that discord would lead them to misfortune.

One day when the quarreling had been much more violent than usual and each of the Sons was moping in a surly manner, he asked one of them to bring him a bundle of sticks. Then handing
the bundle to each of his Sons in turn he told them to try to break it. But although each one tried his best, none was able to
do so.

The Father then untied the bundle and gave the sticks to his Sons to break one by one. This they did very easily.

“My Sons,” said the Father, “do you not see how certain it is that if you agree with each other and help each other, it will be impossible for your enemies to injure you? But if you are divided among yourselves, you will be no stronger than a single stick in that bundle.”

The sons realized their mistake and got reunited.

Moral:
In Unity is Strength.
Disunited families are easily injured by others.
United we stand, Divided we fall.

As oil prices go off the chart, many Americans are taking u-turn towards the railroad. Navtej Kohli Business Blog shares the word with its readers.

Amtrak, America’s struggling passenger railroad, saw record numbers in May when ridership rose 12.3 percent from a year earlier, and ticket sales rose by 15.6 percent.

Amtrak President Alex Kummant said the numbers point to a sixth straight year of record passengers. He estimated a more than 11 percent rise this year on its 21,000 miles of track, building on last year’s 26 million passengers.

He attributes about half that growth to higher gas prices. “It depends on the service but certainly our ridership growth is linked to the fuel prices,” he said in an interview. “We are up against capacity limits.”

The Bush administration has sought to scrap direct federal funding for Amtrak, a for-profit federal corporation that has bled red ink since its 1971 creation. Its backers contend that passenger rail services in other countries also lose money.

The White House threatened on Monday to veto legislation to fund Amtrak for the next five years, saying the U.S. House of Representatives failed to include language that would make the railroad more accountable.

Rising fuel prices diverting traffic to the railroad

The House legislation would authorize Amtrak funding of $14 billion and set up a program of federal matching grants to states for projects to improve passenger service, an arrangement Kummant says is crucial for any expansion.

“That would have a huge impact,” Kummant said. “We are in a different world than even just three or four years ago with gas prices at these levels, with the congestion we face on the highways and with the difficulty in air travel.”

Rail advocates say the rise in passenger numbers underlines the need for greater federal and state funding in railways to bring the United States in line with Europe and Japan and give Amtrak the muscle to compete with commercial airlines.

Courtesy: Reuters

Additional resources: Navtej Kohli

‘Dollar boosted by Bernanke inflation comments’, that goes the headline on Reuters business news section.  Navtej Kohli business blog looks closely into the matter.

The dollar strengthened broadly, reaching a three-month high against the yen after Federal Reserve Chairman Ben Bernanke warned on the risks of inflation, stoking expectations of U.S. interest rate rises.

Bernanke said that the central bank would strongly resist rising inflation expectations, and that the latest surge in energy prices is adding to the dangers from price pressures.

He added that the risk of a substantial downturn in the U.S. economy has receded, sparking broad dollar gains and sending U.S. bond yields soaring.

“Bernanke’s the only thing moving markets. There’s been a big shift in expectations towards … Fed rate hikes and this has lifted the dollar,” said Adam Cole, global head of FX currency strategy at RBC Capital Markets.

The interest rate futures market is now pricing in 70 basis points worth of rises in U.S. rates from the current 2 percent by the end of the year FEDWATCH.

By 0806 GMT the dollar was up 0.3 percent to 106.65 yen, having earlier hit a three month high of 106.83 yen <JPY=>.

The euro was down 0.43 percent at $1.5571 <EUR=> while the dollar was up 0.45 percent against a basket of currencies to 73.209 .DXY.

Courtesy: Reuters

If you’re looking for the latest news in Global Business Arena, Navtej Kohli business blog is a place to be.

The Bank of England will keep interest rates on hold at 5pc, according to economists.

The Bank of England’s nine-strong monetary policy committee is likely to take no action in a bid to combat inflation driven by soaring oil and food prices.

The move will come despite concerns over slowing growth and the current slump in the housing market.

The European Central bank also meets tomorrow, with economists again expecting no change in interest rates.

Know the real meaning Corporate Terms on Navtej Kohli Business Blog.

• 404 - Someone who’s clueless. From the World Wide Web error message “404 Not Found.”. Used as in: “Don’t bother asking him…he’s 404.”
• ADMINISPHERE - The rarefied organizational layers beginning just above the rank and file. Decisions that fall from the adminisphere are often inappropriate or irrelevant to the problems they were designed to solve.
• ALPHA GEEK - The most knowledgeable, technically proficient person in an office or work group.
• BLAMESTORMING - Sitting around in a group discussing why a deadline was missed or a project failed and who was responsible.
• CHAINSAW CONSULTANT - An outside expert brought in to reduce the employee head count, leaving the brass with clean hands.
• CHIPS AND SALSA - Chips = hardware, salsa = software. i.e.: “Well, first we gotta figure out if the problem’s in your chips or your salsa.”
• CLM - Career Limiting Move - Ill-advised activity. Trashing your boss while he or she is within earshot is a serious CLM.
• CUBE FARM - An office filled with cubicles.
• DEINSTALLED - Euphemism for being fired. Voice mail message: “You have reached the number of a deinstalled vice president. Please dial our main number and ask the operator for assistance.”
• DILBERTED - To be exploited and oppressed by your boss. “I’ve been dilberted again. The old man revised the specs for the fourth time this week.”
• FLIGHT RISK - Employees who are suspected of planning to leave the company or department soon.
• G.O.O.D. Job - A “Get-Out-Of-Debt” job. A well-paying job taken to pay off debts, - they will quit as soon as they are solvent again.
• MOUSE POTATO - The on-line, wired generation’s answer to the Couch Potato.
• OHNO-SECOND - That minuscule fraction of time in which you realize that you’ve just made a BIG mistake.
• PERCUSSIVE MAINTENANCE - Whacking an electronic device to get it to work again.
• PRAIRIE DOGGING - When someone yells or drops something loudly in a cube farm, and people’s heads pop up over the walls to see what’s going on.
• SEAGULL MANAGER - A manager who flies in, makes a lot of noise, craps over everything and then leaves.
• STRESS PUPPY - A person who thrives on being stressed out and whiny.
• TREEWARE - Documentation or other printed material.
• XEROX SUBSIDY - Swiping free photocopies from one’s workplace.