Forex

“Forex” is a combination of the words “foreign exchange”. The Forex market deals in the buying and selling of currency and it is the largest financial market in the world. Currency is always traded in pairs. The price of the currency bought as compared to the price of the currency sold is called the exchange rate. The Forex market is often referred to as the “FX” market.

It has a major difference that sets it apart from other markets in that it has no physical location and no central exchange. It operates through an electronic network of banks, corporations and individuals who engage in this type of trading. The lack of a physical exchange makes the Forex a true 24-hour market that extends from one time zone to another without any interruption in trading.

Forex trading begins each day in Sydney, followed by Tokyo, London, and New York. Unlike other financial markets, Forex investors can respond to currency fluctuations caused by economic, social and political events in real time.

The best trading opportunities are usually considered to be the currencies that are the most commonly traded. Their rapid movement makes them the most liquid. Over 85% of all daily transactions involve the buying and selling of these currencies that are sometimes referred to as the “Majors”. They include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.

The Forex market is considered an Over The Counter (OTC) market because transactions are conducted between two entities either over the telephone or through an electronic network.

There are some specific reasons why entities trade in the Forex market. The most common is to earn short-term profits from fluctuations in exchange rates. Traders also use the market to acquire the foreign currency necessary to buy goods and services from other countries

intro-forex

1) Introduction to Forex - Major Currencies

a) The U.S. Dollar.

The United States dollar is the world's main currency – an universal measure to evaluate any other currency traded on Forex. All currencies are generally quoted in U.S. dollar terms. Under conditions of international economic and political unrest, the U.S. dollar is the main safe-haven currency, which was proven particularly well during the Southeast Asian crisis of 1997-1998.

As it was indicated, the U.S. dollar became the leading currency toward the end of the Second World War along the Breton Woods Accord, as the other currencies were virtually pegged against it. The introduction of the euro in 1999 reduced the dollar's importance only marginally.

The other major currencies traded against the U.S. dollar are the euro, Japanese yen, British pound, and Swiss franc.

b) The Euro.

The euro was designed to become the premier currency in trading by simply being quoted in American terms. Like the U.S. dollar, the euro has a strong international presence stemming from members of the European Monetary Union. The currency remains lagued by unequal growth, high unemployment, and government resistance to structural changes. The pair was also weighed in 1999 and 2000 by outflows from foreign investors, particularly Japanese, who were forced to liquidate their losing investments in euro-denominated assets. Moreover, European money managers rebalanced their portfolios and reduced their euro exposure as their needs for hedging currency risk in Europe declined.

c) The Japanese Yen.

The Japanese yen is the third most traded currency in the world; it has a much smaller international presence than the U.S. dollar or the euro. The yen is very liquid around the world, practically around the clock. The natural demand to trade the yen concentrated mostly among the Japanese keiretsu, the economic and financial conglomerates. The yen is much more sensitive to the fortunes of the Nikkei index, the Japanese stock market, and the real estate market.

d) The British Pound.

Until the end of World War II, the pound was the currency of reference. The currency is heavily traded against the euro and the U.S. dollar, but has a spotty presence against other currencies. Prior to the introduction of the euro, both the pound benefited from any doubts about the currency convergence. After the introduction of the euro, Bank of England is attempting to bring the high U.K. rates closer to the lower rates in the euro zone. The pound could join the euro in the early 2000s, provided that the U.K. referendum is positive.

e) The Swiss Franc.

The Swiss franc is the only currency of a major European country that belongs neither to the European Monetary Union nor to the G-7 countries. Although the Swiss economy is relatively small, the Swiss franc is one of the four major currencies, closely resembling the strength and quality of the Swiss economy and finance. Switzerland has a very close economic relationship with Germany, and thus to the euro zone. Therefore, in terms of political uncertainty in the East, the Swiss franc is favored generally over the euro. Typically, it is believed that the Swiss franc is a stable currency. Actually, from a foreign exchange point of view, the Swiss franc closely resembles the patterns of the euro, but lacks its liquidity. As the demand for it exceeds supply, the Swiss franc can be more volatile than the euro.

RISK INFORMATION

The risk of making a loss on the FOREX market can be rather significant. That is why you have to analyze your opportunities concerning trading transactions in detail, taking into consideration your financial situation.

While making decisions you should know the following:

1.        You can lose all of your margin cover and any additional money deposited on your account VIGRI Ltd. (trademark PRO-FOREX.com) for opening or maintaining your position on the market.

2.        Orders of the type “stop-order” and “limit-order” may not be filled because of the current situation on the market.

3.        Low demands for leverage may lead to significant profits as well as to significant losses.

The present risk information does not reflect all the risks as well as other important aspects of the FOREX market. So, before starting to trade, you should learn the specifics of trading on FOREX market in detail. You should conclude an agreement for opening and/or closing on the FOREX market, only if you are absolutely sure of the size of its possible risk and you understand the scope and range of your rights and obligations in details.

I have read, I understand and I agree with the contents of the present RISK INFORMATION

Signature of the client…………………..       Date “…..”……..2006

The Future of the Oil & Gas Industry in Egypt

The Ministry of Petroleum (MoP) oversees four holding companies that manage all elements of the oil and gas business and form joint ventures with international partners: the Egyptian Holding Company for Natural Gas (EGAS), the Egyptian Holding Company for Petrochemicals (ECHEM), Ganoub El Wadi Petroleum Holding Company (GANOPE), and the Egyptian General Petroleum Company (EGPC).

EGPC, set prices and controls every facet of the oil business in Egypt. Oil and gas revenues go directly to EGPC and aren't incorporated into the Egyptian treasury.

The new minister will be under pressure to reform the Oil & Gas sector and to facilitate transparency. A major shake-up at EGPC is inevitable. The likeliest scenario would split EGPC in three between exploration and production activities, refining, and marketing and sales. This will allow the Government of Egypt to have greater visibility into oil and gas revenues.

Egypt's Declining Oil Fields Lead to Growing Reliance on Gas. Many question marks surround the Natural Gas business in Egypt. Israel is importing large quantities of gas from Egypt, which was expected to significantly grow in the coming years. The deal with Israel has raised controversy at home. The new minister faces many challenges and will have to answer tough questions raised by the Egyptian people.

Ghorab the New Minister of Petroleum in Egypt

Eng. Abdallah Ghorab, the Chairman of the Egyptian General Petroleum Corporation (EGPC) accepted the nomination to serve as Egypt Petroleum Minister and to replace Mahmoud Latif who was appointed as a Minster few days ago.

Dr. Essam Sharaf, the new Prime Minister of Egypt meets with Ghorab Today “Monday” for further discussions.

Oil, Oil, Everywhere

The price of oil remains high only because the cost of oil remains so low. We remain dependent on oil from the Mideast not because the planet is running out of buried hydrocarbons, but because extracting oil from the deserts of the Persian Gulf is so easy and cheap that it's risky to invest capital to extract somewhat more stubborn oil from far larger deposits in Alberta.

The market price of oil is indeed hovering up around $50-a-barrel on the spot market. But getting oil to the surface currently costs under $5 a barrel in Saudi Arabia, with the global average cost certainly under $15. And with technology already well in hand, the cost of sucking oil out of the planet we occupy simply will not rise above roughly $30 per barrel for the next 100 years at least.

The cost of oil comes down to the cost of finding, and then lifting or extracting. First, you have to decide where to dig. Exploration costs currently run under $3 per barrel in much of the Mideast, and below $7 for oil hidden deep under the ocean. But these costs have been falling, not rising, because imaging technology that lets geologists peer through miles of water and rock improves faster than supplies recede. Many lower-grade deposits require no new looking at all.

To pick just one example among many, finding costs are essentially zero for the 3.5 trillion barrels of oil that soak the clay in the Orinoco basin in Venezuela, and the Athabasca tar sands in Alberta, Canada. Yes, that's trillion -- over a century's worth of global supply, at the current 30-billion-barrel-a-year rate of consumption.

Then you have to get the oil out of the sand -- or the sand out of the oil. In the Mideast, current lifting costs run $1 to $2.50 per barrel at the very most; lifting costs in Iraq probably run closer to 50 cents, though OPEC strains not to publicize any such embarrassingly low numbers. For the most expensive offshore platforms in the North Sea, lifting costs (capital investment plus operating costs) currently run comfortably south of $15 per barrel. Tar sands, by contrast, are simply strip mined, like western coal, and that's very cheap -- but then you spend another $10, or maybe $15, separating the oil from the dirt. To do that, oil or gas extracted from the site itself is burned to heat water, which is then used to "crack" the bitumen from the clay; the bitumen is then chemically split to produce lighter petroleum.

In sum, it costs under $5 per barrel to pump oil out from under the sand in Iraq, and about $15 to melt it out of the sand in Alberta. So why don't we just learn to love hockey and shop Canadian? Conventional Canadian wells already supply us with more oil than Saudi Arabia, and the Canadian tar is now delivering, too. The $5 billion (U.S.) Athabasca Oil Sands Project that Shell and ChevronTexaco opened in Alberta last year is now pumping 155,000 barrels per day. And to our south, Venezuela's Orinoco Belt yields 500,000 barrels daily.

But here's the catch: By simply opening up its spigots for a few years, Saudi Arabia could, in short order, force a complete write-off of the huge capital investments in Athabasca and Orinoco. Investing billions in tar-sand refineries is risky not because getting oil out of Alberta is especially difficult or expensive, but because getting oil out of Arabia is so easy and cheap. Oil prices gyrate and occasionally spike -- both up and down -- not because oil is scarce, but because it's so abundant in places where good government is scarce. Investing $5 billion dollars over five years to build a new tar-sand refinery in Alberta is indeed risky when a second cousin of Osama bin Laden can knock $20 off the price of oil with an idle wave of his hand on any given day in Riyadh.

The one consolation is that Arabia faces a quandary of its own. Once the offshore platform has been deployed in the North Sea, once the humongous crock pot is up and cooking in Alberta, its cost is sunk. The original investors may never recover their capital, but after it has been written off, somebody can go ahead and produce oil very profitably going forward. And capital costs are going to keep falling, because the cost of a tar-sand refinery depends on technology, and technology costs always fall. Bacteria, for example, have already been successfully bioengineered to crack heavy oil molecules to help clean up oil spills, and to mine low-grade copper; bugs could likewise end up trampling out the vintage where the Albertan oil is stored.

In the short term anything remains possible. Demand for oil grows daily in China and India, where good government is finally taking root, while much of the earth's most accessible oil lies under land controlled by feudal theocracies, kleptocrats, and fanatics. Day by day, just as it should, the market attempts to incorporate these two antithetical realities into the spot price of crude. But to suppose that those prices foreshadow the exhaustion of the planet itself is silly.

The cost of extracting oil from the earth has not gone up over the past century, it has held remarkably steady. Going forward, over the longer term, it may rise very gradually, but certainly not fast. The earth is far bigger than people think, the untapped deposits are huge, and the technologies for separating oil from planet keep getting better. U.S. oil policy should be to promote new capital investment in the United States, Canada, and other oil-producing countries that are politically stable, and promote stable government in those that aren't.

Gold Deposits: The Quartz-Pebble Conglomerates

When it comes to gold exploration, the saying goes “gold is where you find it.” Gold is found in a variety of geological settings, and is contained within sedimentary, igneous, and metamorphic rocks. Various classification systems have been developed, many of these can be quite confusing if you are not a geologist. The most basic classification system is to group gold deposits into two broad categories; primary and secondary.

Primary deposits form where gold precipitates during chemical reactions between hydrothermal mineralizing solutions and rocks in the Earth’s crust. To further simplify primary deposits, they can be classifications as epigenetic and syngenetic. Epigenetic are deposits that form after the formation of the surrounding rocks while syngenetic deposits refer to deposits that form at the same time as surrounding rocks. In epigenetic hydrothermal deposits gold may occur as the principle metal or as a secondary mineral associated with other metals, such as iron, copper, lead and zinc.

Secondary deposits, also commonly referred to as “placer deposits”, are formed from the weathering and erosion of primary deposits that are later re-concentrated into gold-bearing sedimentary deposits. Secondary gold occurrences are generally classified according to their depositional environment. Marine placers occur offshore near coastlines, and fluvial placers occur in rivers and stream valleys.

Gold can also occur is somewhat unexpected places. In fact, quartz-pebble conglomerates and quartzite deposits are an unusual place to find gold. While these locales may be an unexpected place to find gold, they are, overall, the world’s largest source of gold- supplying more than 50 percent of the world’s gold. These deposits may also be economic sources of uranium, thorium, and rare earths.

The origin and evolutions of these styles of deposits is complex, and diverse, and beyond the scope of this piece. There are, however, some basic characteristics that can help identify these types of deposits. The ore bodies in the quartz-pebble conglomerate deposits are marked by the presence of abundant pyrite or hematite with variable and usually minor to trace amounts of a host of other sulfides, arsenides, and sulfosalts. The gold is mainly present as the native metal in a very finely divided form essentially in the matrix of the conglomerates or quartzites; minor amounts of the element also occur in the pyrite and in the various other sulfides, arsenides, sulfosalts, and so forth. Elements concentrated in the quartz-pebble conglomerate type of deposit are variable.

When it comes to quartzite deposits, in the past these deposits have been overlooked because the gold in quartzite can be invisible to the unaided eye.  The gold in quartzite occurs when sandstone is metamorphosed by hydrothermal action with gold and silver bearing hydrothermal waters that further cements the grains together. Sandstone is porous readily giving this water access. It is the silica in the water causes the transformation of sandstone into quartzite by cementing the individual grains together.

Uranium

It is important to note that gold bearing, quartz pebble conglomerates can be an important source of uranium. In fact, they were the primary source of uranium for several decades after World War II.  The most significant deposits of this type are the Huronian Supergroup in Canada and in the Witwatersrand Supergroup of South Africa. These deposits make up approximately 13 percent of the world’s uranium resources. The deposits are typically low grade but characterized by high tonnages.

The Witwatersrand

The Witwatersrand of South Africa is a quartz pebble conglomerate that hosts economic reserves of gold and uranium. The Witwatersrand Gold Rush of 1886 has been attributed to the establishment of Johannesburg. The “Rand” or reef, as the Witwatersrand is sometimes known, is famous for being the source of 40 percent of the gold ever mined from the earth. It extends for 280 kilometers from Klerksdorp in the west to Bethal in the east and is 4 kilometers deep in places. The deposit was such a key component to the development of South Africa, that the local currency “The Rand” was named after it.

Quartz-pebble conglomerate deposits are a valuable asset for miners and explorers. Here is a sample of miners/explorers with interests in gold quartz-pebble conglomerate deposits:
Gold One International (ASX:GDO)(JSE:GDO) (formerly BMA Gold)
Yamana Gold (TSE:YRI)
StrikePoint Gold (CVE: SKP)