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Thursday, August 14, 2008
Cavuto: New Cold War in Our Hands
Neil Cavuto, Anchor and Managing Editor
FOXBusiness
Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com
Ok, here's the deal:
Let's make a deal.
The Cold War is back, my friends.
Anyone have some cold, hard cash to pay for it?
Because just in case you think this Russian thing in Georgia is ending with Georgia...the cold hard truth?
Lots of cold, hard talk.
And please stop me if you've heard this talk before:
"There must be consequences for these Russian actions."
"Russia wants to reassert a traditional sphere of influence."
"We must reassess all relations with Moscow."
That's not former Defense Secretary Robert McNamara talking about the soviets nearly 50 years ago.
That's Defense Secretary Robert Gates today.
Responding to a Russian threat we had long feared but hoped wouldn't materialize.
News flash: it has.
And with it, the reality that we have to deal with that threat now that it has.
Trouble is, there's little money in the till.
In fact, there's no money in the till.
Who knew that the great August surprise turned out to be not just an emboldened Russia taking advantage of a beholden west...but the west beholding the prospect that every fiscal plan that called for a cutback in military spending isn't worth the proverbial paper it's printed on.
Up until all this happened, everyone in Washington talked about declining defense spending. We'd wind down in Iraq, spend less in Iraq, and take that dough and spend it somewhere else.
Now it turns out that somewhere else might be more defense for a Cold War whose dimensions we cannot imagine, but whose implications we cannot afford "not" to imagine.
I'm telling you, my friends, whether it's John McCain or Barack Obama, military spending just became a priority again. I'm not saying that's good or bad, or even justified...It just is.
Get over it.
Get on with it.
Time to deal the cold cash.
Because like it or not, we've got ourselves a Cold War.
FOX Translator
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No, it's not a dance craze. Contago is a condition of supply and demand, essentially a fancy word to say that prices for items, typically commodities, are cheaper now than they would be at some point down the line.
Anything that¿s sold in the futures market can be in a case of contango. Futures are exactly that: a contract to buy an item or asset at a price in the future. This is the case with oil, with traders buying and selling contracts to acquire a barrel of oil in months down the line. When a market is in contango, spot prices, or the price of a commodity if you were to buy it right now, are lower than forward prices.
Why is that important? Well, it usually tells you the supply of a given commodity is plentiful (since, according to Economics 101, a large supply usually leads to cheap prices).
Incidentally, if you think contango is a mouthful, its opposite condition is known by the equally tongue-tying term backwardation.






