Black Gold or Yellow Gold? 54 comments
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Take your pick. Either one is going to make you money. Oil was up over $10 on Thursday and Friday, setting records for both its high price and its US dollar move. In response, the US stock market tanked on Friday and the S&P500 is now down 6.5% for the year.
Reports say US citizens' net worth fell in the first quarter for the second quarter in a row. Talk from Israel about bombing Iran didn't help. If this happens and Iran responds by bottling up the Straits of Hormuz, well then $200/barrel oil will look like a nice bargain and a very severe recession, if not depression, will begin. Of course Israel is on track with Project Better Place to switch over to electric cars. Perhaps the Israelis will wait until their transition to electric cars is complete so they won't be affected by the high price of oil. If that is the case, I suppose we have a year or two before the bombs start dropping.
Regardless of any Israeli action, oil will go to $200/barrel and higher. The inconvenient truth is that worldwide oil supply is simply not keeping pace with worldwide oil demand. The speculators are getting a lot of the blame, but I can't blame them. Are there any rational policies coming from the largest consumer and importer of oil (the US)? Is there any reason to believe that China, India, Russia, and the Middle East will slow down their growth in consumption? Exxon (XOM), Chevron (CVX), and ConocoPhillips (COP) all reported less oil production in 2007 than in 2006 - this in a time when oil prices doubled. That can't be a good sign.
Countries around the world are nationalizing their oil reserves, cutting off needed investment and reducing production capability. The US dollar remains weak, and appears to be headed for another leg down despite all the rhetoric. Because that is all it is, rhetoric. Who can blame the speculators for pushing up the price of crude? I can't. In fact, oil over $200/barrel is exactly what the US needs as it is probably the only thing that will prod the government into action (but don't hold your breath).
Speaking of government policy, just what has been the response of the US government to high oil prices? A lot of talk, no action. There is talk of windfall profits taxes. Well, we all know that doesn't work, as the oil company's lawful responsibility to shareholders means they will simply cut back on exploration and production budgets to keep their profit margins. This will result in LESS crude oil and exacerbate the problem. They also talk about suing OPEC members, which is so laughable I won't spend any print on it. Gas tax holiday? Sure, let's encourage gasoline usage at a time when oil prices are high - that makes a lot of sense [not]. It is exactly the opposite to what we should be doing (raising taxes on gasoline to fund non-oil energy projects like wind, solar, nuclear, and LNG). Any talk of drilling in Alaska or off the continental shelf in the lower-48? Of course not.
Even more worrisome is the US dollar policy. Bernanke talked a good game, but everyone knows he can't do anything but print more dollars: the banking sector is in shambles, the US consumer is loaded with debt (credit cards, home, auto), the US savings rate is a disgrace, and the fiscal and trade deficits out of control. The US imports 60% of its oil and is sending $650 billion dollars out of the country every year, and that number is rising with the price of oil.
What does the President have to say? Well, on Friday, a day when oil was up nearly $8 to a record high and the US dollar was weak (again), President Bush made yet another urgent plea to make his tax cuts permanent (!). In his mind, it is more important to give tax cuts to those making hundreds of millions of dollars every year than it is to acknowledge the role that deficit spending has had on the weak US dollar and therefore the price of oil! Amazing. If that is the government's policy, then why stop at $600 rebate checks? Why not just print $6000 rebate checks? Or even $60,000 checks? I mean, once the currency is not defended, what exactly is the end game here? Do the uber-wealthy making hundreds of millions of dollars every year simply find another country to make their homes once the US currency goes to zero? This is insanity at its highest level.
Click this link to read a REAL energy policy.
People wonder why I mix politics and economics. Well, here is the answer: the US dollar. Don't think for a minute that politics are not related to the US dollar! Look at the S&P500 return for the last 10 years - less than 3.5% and less than inflation. Meanwhile, the value of the US dollar has dropped by 50% in that time period.
Speaking of inflation, just wait til Dow Chemical's (DOW) 20-30% price increases ripple through to Wal Mart (WMT). Did you hear the comments made by Dow's CEO? He railed on the US government for the lack of an comprehensive energy policy. Similar comments made by Jim Mulva, CEO of ConocoPhillips, likewise went unheard by the government. I thought the Republican administration was supposed to listen to business. Why aren't they?
Ok, back to investments. Gold had a huge rise on Friday and will be heading higher along with oil, the weak dollar, and rising inflation. Buy GLD and just hold it. Buy Fidelity Select Gold (FSAGX) and just hold it. Buy some gold bullion and bury it in the backyard.
What is up with the oil stocks? On Friday, they jumped early in the morning following crude oil and then sold off. Why? Many oil stocks are trading at PE's less than the market average! Why? Sure, some oil stocks get margins crimped on their refined gasoline, but good-gracious, many produce oil and gas out of the ground and are going to make TONS of money! Lukoil (LUKOY.PK) kicked some serious butt with their profit report, yet ConocoPhillips doesn't move? Give me a break. Buy these stocks, funds, and ETFs funds as oil and gas are going higher:
- GLD (Gold ETF)
- Fidelity Select Gold (FSAGX)
- Vanguard Precious Metals (VGPMX)
- USO (Oil ETF)
- ConocoPhillips (COP)
- StatOil (STO)
- Schlumberger (SLB)
- Nabors (NBR)
- Fidelity Select Energy Services (FSESX)
- Fidleity Select Natural Gas (FSNGX)
Any one see the Lehman report about the oil company's planned spending budgets? If not, here it is (Reuters).This is yet another reason oil services are the single best investment theme in the market today.
Disclosure: The author is long all of the investments listed above except, unfortunately, USO.
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This article has 54 comments:
By the way it may be too late to buy oil and gold.
It demonstrates why Blogs will take information distribution away form news papers who are channeled into the "right thing to say" for fear of losing Government Ads revenue and Government free news releasee propaganda of all sorts.
The internet is awsome in many many ways. Treasure it. Remember its beginning bywords "There is no here, there is no there, there is no past, there is no future, everything is here now."
The government is the problem and not the solution. Why doesn't it cut its payroll and the the crushing load it places on the USA economy when that economy sags?
The problem with investing with the Wall Street brokers? They trade all over the place.
Recognize the trends. Go long and stay long. It might not be as exciting as day trading, but you'll do better, ultimately.
A main problem is a stupid president who did not understand that he should be a steward of his country's wealth. He wa captured by the oil industry and oligarchs who want to pass on trillions to their offspring without taxes.
I am hopeful our next president has read more than comic books, and will chart a program that makes it possible for the US to grow.
We can double our population (easily done) and we have growth.
The current malaise is just a blip, with dislocation among two groups that have disporportionate shouting rights: out of work Wall Streeters and "moiddle class" people who were seduced by Madison Avenue and lived beyond their means.
The US is the best bet of any country on the planet. Keep the whining in proper perspective, and don't elect another president who was near the bottom of his class. Presidents should be well educated and smart.
We have bright prospects, if we work and stop whining.
LordDarley
optionsgirl: i sincerely apologize if i offended anyone (jewish or arab). i know better than to get in the middle of that debate. that said, re-reading it, my wording could have been better! the point i was trying to make, and have made before when i praised Israel for their Project Better Place iniative on electric cars, is that some countries (unlike the US) are attempting to release themselves from oil dependency. please read my past energy policy posting where i am sure you will understand my view on this subject.
CLH: at this point, i respectfully disagree that the gov should get out of the way. the challenge facing us in this energy crisis is so immense, we must have government leadership and support to pull it off. certainly the policies of the last few years have not been helpful, and have magnified both the urgency and the scope of what has to be accomplished.
BMiki: i was unaware that Vanguard PM was closed, and that being the case i certainly should not be recommending it! thanks for the heads up!
LordDarley: sorry for the gloom and doom. i don't like to be that way, but alas, i try to be a realist. i started my campaign about worldwide oil supply/demand when oil was at $55 and i was told i was an idiot, doomsdayer, numbskull, etc. etc. now it's at $135, and still no energy policy from the US government or much recognition at all from the US media that we are in a crisis that threatens our economy and national security. i cannot say today that the US is the best nation on the planet: we import 60% of our energy, have two undeclared "wars", our dollar has dropped over 50% since bush was in office, our fiscal deficit is out of control while we give tax breaks to the uber-wealthy. sorry, but in my opinion, the policies of the US government are so skewed, i think we'll have alot of trouble recovering from the hole we have dug (and continue to dig...).
ALL: i continue to pound the table for Americans to get active, alert their political leaders, and support a sound, well-crafted, long-term, comprehensive energy policy:
seekingalpha.com/artic...
thefitzman.blogspot.co...
But I'm getting off point. Creative initiatives like Agassi's Project Better Place are precisely what's needed to start weaning ourselves off oil, and the fact that Renault/Nissan's Carlos Ghosn is 100% behind it with Israel as first adopter says to me it has a very good chance of succeeding and becoming a model for the rest of the planet.
I have been following lithium battery development for several years now and we are VERY close (2-3 years) to seeing mass production of deep, powerful (and safe) 10-year battery packs that will enable PHEVs to go 30-50 miles per charge before the gasser kicks in. This is a game changer for sure as consumers will flock to these cars if the price is right. Interestingly, NIMH battery tech is far from dead, and Honda may well be the first automaker to hit the sweet spot price-wise with its upcoming economy hybrid, which will run on this older, more proven battery tech. Look for PHEVs to go with lithium and non-plug-in hybrids to stay with the nickel batteries. Toyota just announced it is investing close to a billion dollars in battery plants to build both with its partner, Panasonic EV.
P.S. Historically ironic trivia question of the day (I promise it is VERY on topic): What product line did GM's now on-the-block Hummer brand replace on the factory lines in the mid-90's?
Yup, the EV1 electric cars, which were abandoned, with existing models gathered and crushed by the company. See "Who Killed the Electric Car" for all the stomach-churning details.
Extra credit follow-up question: What was Toyota's president's pet project at the same time (mid-1990's), something he believed in so strongly (even with oil at $10-20/barrel) that he put the company into near crisis mode to get it produced within two years?
Yup, the Prius, which just passed the millionth unit sold mark, and which has cemented Toyota's lead in hybrid auto technology. There is no mystery or magic to their ongoing grab of market share and supremacy in their sector, only smart, committed, and prescient business acumen, something Detroit has shown a consistent lack of. If you want to get really depressed about this company, Google "GM hybrid battery recall" to read about their latest debacle, namely 9,000 leaky NIMH Cobasys battery packs in the Saturn Vue mild hybrid.
(Toyota's Prius packs have been nearly perfect, with many going 200,000 miles on the original.)
Hold some double short SNP too, it is called hedging.
Good article.
only one thing i cannot agree is making just only for oil the mistake to look for it at places which are to dangerous in the long term, i.e. alaska. once the environment there is "broken" you cannt mend it with the money you have gained by the oil. its like midas and gold.
optionsgirl: i've changed my mind, and will get in the middle of the Israeli/Arab debate. these things need to be said in spite of the hellstorm that will be dumped on me for saying so:
i was less than honest in my first reply to you. it was indeed sarcism and a dig at US/Israeli policy. i believe that policy has been a complete disaster - not only to the US, but to Israel as well. let me explain:
it is no big secret that Israeli lobbyists were pushing hard for war in Iraq (like they are now for war in Iran). they also have refused to acknowledge the right of a Palestinian state. so, what's the result of these policies?
- massive backlash in the arab world against the US and Israel
- precipitated the first war i can remember that Israel did not walk away the clear winner
- made Iraq a beehive of "terrorism"
- deficit US spending leading to a huge fall in the US dollar
- fall of US prestige in the world (not to mention a reputation for torture)
but, most importantly, US/Israeli policy has resulted in these two items:
- strengthened the arab oil producers by helping to raise the price of oil thus generating arab wealth beyond all comprehension
- forced Iran to develop a nuclear policy
explanation for these two views:
when the US went into Iraq in a manufactured war where Rumsfeld actually threatened to use nuclear weapons (!), it took millions of barrels of oil off the markets for years. at the same time developing country oil demand went up. the price of oil popped. as the Iraqi conflict raged on year after year, a geopolitical price premium was tacked onto oil, and has remained ingrained in the price. oil went higher again. Arab oil producers are becoming ungodly wealthy. this would have happened sooner or later due to worldwide supply/demand fundamentals, but US/Israeli policy accelerated the price movement to the upside. look as friday's over $10 move in oil - all based on an Israeli official saying a strike against Iran was "inevitable". even more wealth to Arabs. good for Israel??
on the second point, Iran has watched its neighbor Iraq be invaded, lose their sovereigncy not to mention hundreds of thousands of its citizens dead. just to make a point, what would you expect US response to be if a foreign country invaded say Mexico, called the US a member of the "axis of evil" and possesed nuclear weapons and threatened to use them? wouldn't US policy in that scenario be extremenly foolish not to develop nuclear technology to protect itself? ok then, why is it different for Iran? if i were them, i would be arming myself too! good for Israel??
see, the US/Israeli policy has brought on the exact scenario that they are now complaining about! it is a failed policy: the Arabs are richer and want nuclear weapons to protect themselves from US/Israeli policy.
now, the Russians made a great proposal to solve the Iranian situation - international inspections, Russian delivery of the fuel, diplomacy etc. what was the response by the Israeli lobby and the US? no negotiations along those lines. Iran proceeded accordingly.
speaking of Russia, how long do you think Russia and China are going to stand by and watch the US/Israel connection take over middle eastern oil that they themselves so badly need (at least in China's case)?
now, Israeli had a leader of vision who could see through all this stuff, and was backed by the majority of its people. he, in an event so remininscient of JFK, was assassinated. what was the result? more war, death, and still no Isreali security.
the thing i don't understand about Israeli policy is this: if the argument Israel made about its right to exist as their own country was correct, then why does that same argument not hold true for the Palestinians many of which were evicted from the land that is now Israel? it just doesn't make sense to me. it is not logical. and it will simply not lead to peace or Israeli security. i believe Yitzhak Rabin understood this.
violence only leads to more violence. the way forward, like Obama has said many times, is via diplomatic means. if Israel or the US bombs Iran, and if Iran responds by shutting down the straits of Hormuz, which most intelligence reports say they are capable of doing, 25% of the world's oil supply goes off the market in an instant. what do you think the price of oil will do? what do you think the result of that price and supply disruption will be to a US economy that is already on the brink of a recession? to the world's economy?
as i have said many times, it won't matter how many US dollars a person holds in their account(s) if the basics of food and protection are gone. this could easily happen if a economic depression hits the US as a result of Israeli or US bombing of Iran. we go into economic chaos if the price of oil goes to $300/barrel, or worse yet, cannot be obtained in quantity at any price. that is where current US/Israeli policy is leading us, IMHO.
thus, the sarcastic remark.
leh: thanks and great comments!
do the numbers and we actually import 73.8% of our oil.
We are also starting to import more gasoline.......we may be worse off than you think.
Our standard of living here in the U.S. is declining. We are, on average, wealthy enough to weather a "tougher life." But, people in the third world will be hit much harder.
What do you think of the following? ...
Let's stop producing ethanol from corn or any other biomass, all of which are an energy negative process, and go back to MTBE. Yes, we actually cause from greater energy consumption by turning corn into ethanol. This idea is the only one I can think of that could be done relatively quickly to give some relief to gasoline prices. How much? I don't know... does anyone else?
We need nuclear, wind and domestic exploration of natural gas and oil. But, as you say Michael, we have no plans on the books. We have no leadership. We don't have a leader. Keep blogging please.
"Knowlegdeable observers should inform Mr. Obama that our country is currently the largest supplier of energy to the United States."
That Barack Obama wouldn't be aware of this tells me that having been through 8 years of the amateur hour, we're in for another four at least. The Senator's clumsy attempt to assure the Canadians that he supported NAFTA (he was against it before he was for it, I guess) was painful to watch.
Suffice it to say that if we manage to antagonize even the Canadians, we'll have pretty much alienated the entire world. Moreover, given the way Nancy Pelosi torpedoed the Colombia Trade Pact (taking care of her big labor buddies) we're well on our way to doing the same thing in Latin America--unwise given the large oil reserves off Brazil. Sorry if this sounds political--it's actually coming from a centrist Democrat.
The G8 meeting this weekend did not offer much hope of near term relief. They didn't blame speculators or big oil for the rise in the price of crude. They seemed to accept the supply/demand argument as the primary cause of the rise in oil. Their focus was on conservation and alternative energy. Wonder why? Maybe they know that we are reaching or are at the peak in economically available petrol.
Visit americansolutions.com to promote development domestic exploration for oil. If we don't tend to our own business on energy, we'll be out of business!!
with respect to iraq, we are now spending over $100 billion annually on the war. that tab is about $3,600 per iraqi, which is more than triple iraq's 2007 per capita income. the entire budget of the country is about $48 billion for 2008. what do i conclude from this?
iraq is our 52nd state.
the part of the author's post i take issue with is that of the effect of speculation on oil prices. it should be severely curtailed, and here is why:
futures markets are a comparatively new innovation, particularly for oil trading. they were designed for the purpose of allowing producers and users a vehicle to hedge their production and/or consumption activities. these markets were never intended to function as a proxy for currency, currency hedges or a hedge against the actions or inactions of incompetent governments like our own. to the extent that financial speculators are permitted to distort the equilibrium price by distorting supply/demand fundamentals through en mass buying and rolling over long positions, never taking delivery of the end product, it has the potential to threaten the national security of any non-producing nation. that hank paulson, our own treasury secretary, denys that speculation is a material factor in today's oil prices is the position of an idiot. underlying demand for the raw product has not resulted in a quadrupling of the price in 4 years and a double in one year. supply and demand is just one of many factors at work here....all others under the umbrella of "speculative activity."
adding fuel t the speulative fire is the unintended consequences of absurdly low short term interest rates, rendering the opportunity cost of commodities speculation nearly negligible. that, along with 14:1 leverage for oil traders, lowers the bar for virtually anyone who wishes to try their hand at speculation...whether a hedge fund or an armchair trader.
i don't believe in banning futures trading in oil or anything else. i do believe in recognizing that speculators have usurped the domain intended for legitimate hedging activities of producers and users. raise the margin requirement from its current 7% or so to 50%. then let traders speculate all they wish, if they can afford it.
This is not a political blog however and your recommendations are spot on and timely. The best I have seen in about a week. We do need it at $200.00 so we can wake up and move on to better things. Remember, "De Facto Peak Oil."
Too late to buy gold? It's well over 100% below its inflation adjusted high from 28 years ago. You should count yourself fortunate gold took a breather and retracted giving you another shot.
Now is the time to be buying, that is, of course unless you believe the government has a handle of things.
you're part of the "i don't give a damn what's best for the country as long as i get what i want, and everybody is a dumb ass but me" crowd.
can't say i know many people like that....can't say i want to.
There is a crisis brewing and many of you see and that is due to two causes religion (which for its own benefit, promotes population growth) and formerly cheap energy due to oil. Both have created the population explosion which can no longer be sustained but is supposed increase to 9 billion. Read The Long Emergency by James Howard Kunstler for more.
My sister, who is a caring person, is typical of many Americans. When I told her to read the above book, she declined because she doesn't want to read depressing books. When i asked her how much gas she uses, she didn't know (drives a Hyundai SUV). She would never vote for Obama and voted for Bush two times. I love her, but we are doomed.
The Iraq war was a complete an utter farce, and that has been pretty well established. They had trouble just keeping the lights on at night, let alone produce weapons of mass anything. Whatever the reasons for the invasion, you can be sure that WMD's were merely used to try to scare America stupid (which, apparently, is very easy to do). In fact, if we would stop screwing around in that area of the world overthrowing democracies and installing ruthless dictators, we'd probably have a lot fewer problems. And more money to spend here. And a balanced budget.
A sensible energy policy would go a long way to help, but secret meetings with big oil a la Dick Cheney are not the way to go about it. High oil is, IMHO, a good kick in the thigh-bangers for this country.
More oil is not the answer, and will at best provide temporary relief.
~X~
oilismastery.blogspot..../
philips: that is exactly what i have been telling the "plenty of oil out there" proponents: why the heck would saudi and the oil majors be processing heavy crude, and in the case of the tar sands, loading tar into huge trucks, transporting it to a refinery where they basically boil the oil out if there was such plentiful easy to access oil as these guys seem to believe? it doesn't pass the sanity test.
TedSpick: a cheap shot is only cheap if it is untrue. you can back bush all you want, but since we are on an investment website, here are some facts:
1) bush has grown the size of the US government to 30% of GDP
2) bush has grown the US deficit to the largest in history
3) bush's tax and spend policies have led to the dollar's 50% devaluation
4) after inflation and dollar's devaluation, REAL returns in the S&P are negative for his entire term (!)
5) oil has gone up 6x during his administration
these are facts, not cheap shots.
pursley: i very much take acception to, and RESENT, being called a Neo-Nazis! what i tried to do was give an even handed objective over-view of what US/Israeli policy has led to: bad news for both the US and Israel. was Yitzhak Rabin a neo-Nazi? no, he was a Jew who won the Nobel Peace Prize. i'll debate you on the issue, but respond on a point by point basis, not with name calling. up until now we've had a fairly intellectual back-n-forth. i've lost respect for you with this latest post.
TAS: yeah, Jimmy Carter was a real bad guy... he wanted us to get off foreign oil and into solar, wind, and nuclear. in retrospect, he was DEAD RIGHT. all that's happened since then is an end to that "political" energy crisis and a return to your idiotic ways of oil dependence. so, now we spend $700 billion a year out of the country for oil, and our US currency is being devalued. if Obama will offer me and the country the policies of Jimmy Carter with respect to energy, perhaps there is hope after all. we've seen what 8 years of Bush led "conservative republicanism" has gotten us: a much, much, much weaker country on every level: domestic policy, foreign policy, and economic policy. they are not "conservatives", they are the most radical administration in the history of the US. and, despite all the bullshit about republicans being good for "the markets", well, check out the *real* returns of the S&P during their "reign", NEGATIVE. and he'll leave with the worst to come....
Alas I must respond unfortunately, your justifying the nuclear arming if Iran was without a doubt the most insane thing I've seen and your representation of Iraqi casualties with a dollar amount, truley despicable....honestly man its people such as you that are ruining the world, talking as though people are meerly a certain amount of money and that them having the oppurtunity to share some of the basic freedoms you do, is a drain on our economy.
You should stick to things you know sir, not presume to because you read it somewhere or saw it on TV. I'm glad that there are some patriotic people still around to watch the country while I'm gone, because if left up to people such as yourself, we'd be lost and your silly backing of Obama illustrates this point clearly.
hello1: if you are speaking about my statement that the oil companies have "lawful responsibility" to their shareholders, this is indeed the case, and indeed exactly what the oil companies themselves had said if congress imposes windfall profits taxes: they will pull in their exploration and production budgets to keep their margins in tact (i.e. to keep share price from falling). this means less oil. so, you say it lacks reasoning, but that is exactly what the CEO's of the oil majors are saying, and, as i shareholders in these companies, that is exactly what i want to hear!
there is no collusion. the futures market is setting the price of oil and they see:
1) increasing demand from china, russia, india, the middle east
2) production decreasing last year from XOM, COP, and CVX
3) nationalitzation of oil in venezuela, russia, and soon brazil
4) cheap, plentiful easy to refine sweet crude production dropping
5) digging tar sands and saudi finally increasing heavy crude production
6) large depletion rates in mexico, north sea, prudoe bay, and russian oil production decline after years of growth
how in the world should oil prices go DOWN with all of the above taking place?
Interesting piece, and I do like your realization that politics and the economy, especially in an election year, are linked.
My quibble is with your above. The Dollar has dropped over 70% to gold from it's highs in the late '90's, those glorious days of $24 oil and $250 gold and $2.00 wheat. Deficits, debt, low interest rates, and hyperactive printing presses are the culprits and we are trapped by unfunded liabilities into keeping the Dollar low to repay debt with Monopoly money. We'll have a brief outbreak of stronger Dollar before the election to throw a lifeline to the incumbents, then the Dollar falls again with no predictable bottom.
We need to get off ALL oil, not just foreign. As long as we depend on people who are opposed to our way of life, we will be held hostage; economically at first, then politically. It will be painful, but if we expect to survive, we must start now. Unfortunately, what I've heard from both parties sounds like more of the same.
sustainablog.org/2008/.../
Small research efforts are yielding many exciting answers, but sadly are often underfunded. There can be no doubt that eventually we HAVE to turn to alternatives and those who produce them will be be selling them to everyone else. That sounds a lot like what is going on now with oil. Will we be selling or buying the alternative solutions?
What I mean in my writing is how on earth are you gonna change anything to do with this economy or country. The President, Federal Reserve, Military, Hillary Clinton, John McCain, Barack, nobody can change what is about to happen with our energy crisis. I have been invested in oil since it was $30 a barrel in 2000 and I keep listening to everyone say it is speculation and that oil will pull back. Well I just do not believe that anymore. Oil is going to keep rising until we fall into a great depression (GLOBALLY) and we no longer have demand or supply issues.
We have wars were Middle Easterners are trying to blow up pipe lines and terrorize the world because we do not have the same beliefs as they do. Osama has taught them how to hurt us financially. I think we need to start playing dirty. If you want to blow up a pipe line or kill someone and you put it on a website and brag about it then the US should blow up a religous interest of Al Qaeda's and put it on CNBC and laugh. Screw that politically correct crap, we need to grow some balls as a country and stop letting foreigners try to change our religion, language and beliefs.
Try to make money where you can in the market, speculation is a good thing if you are invested in a part the economy that is going to head north with or without speculation. You and I are not in a position to change our energy policy. We will not be able to do shit about rising oil except drive less and hedge yourself against rising prices by buying stock in oil drillers, oil service companies and gold.
It's not that I do not give a damn, it's that it does not make a f-ing difference. So invest smart and make some money before the shit hits the fan!
misschinagirl: you said "The idea that companies will cut production in response to a windfall profits tax is not necessarily true. A company's responsibility to shareholders is not to increase profit margins -- it is to maximize total profit." which i suppose i agree with. what i said was that they would cut exploration and production *budgets* (which the CEO's have said), which would, in my opinion, which would then lead to a cut in production. they are not necessarily the same thing. that said, i agree they will maximize profits, which in my mind maximizes margins (i.e. they will continue to pump the cheap oil where they already have the infrastructure built, but hold off on the multi-billions dollar E&P projects until the government comes back around - or takes them over! :O
Here is one way to really Hurt the Oil Companies. Switch to Full Synthetic Motor Oil. Then Change you Oil every 20,000 miles .... BUT .... Change your Oil (Filter) every 5,000 miles. With Full Synthetic Motor Oil ..... this is Not a Problem.
As for Oil in the Ground ......... Alaska has enough Oil in the Gound to last America for another 200 years ........ IF you can get the Environmental Idiots to take a Long Vacation out of D.C.
globalpublicmedia.com/...
It's a speech about the mathematics of increasing consumption, which might surprise people who haven't studied logarithms (it sure as hell surprised me).
Video here:
globalpublicmedia.com/...
Who's with me? Show of hands please.
It needs to be done every two hundred years or so.
Again, it was just a joke. Your boss should do whatever he feels like Jesus wants him to do. Bomb, kill, wiretap, dismiss democrats from key positions of government, start illegal wars without declaring them, erode the power of congress, increase the power of the President to do basically whatever the heck he wants. Yeah I'm all on board with you Mr. CIA man. George (Caesar) Bush should suspend the constitution because most Americans have never even read that stupid piece of paper anyway and have no idea what's in it. What would Jesus do?
All Hail King George III. Caesar of America. Magister Populi.
-Cincinnatus
thefitzman.blogspot.co...
thanks for clarifying your comments. i don't fault anyone for making money in any legal way they can, including through speculation. i do it every day myself. i agree that our lack of leadership has put us in the most dire economic circumstances faced in my lifetime and i ain't no kid. i agree that we're between a rock and a hard place and that the traditional formulas...e.g. pushing interest rates lower...will not solve our structural problems. we're a nation of wussies and in many ways we have the leadership we deserve. i don't agree that violence will solve our economic problems either, but i understand the temptation to use it at times. good luck trading!
fitzman:
you taught me something about my own comment. it's ironic indeed that our 51st and 52nd states are serial enemies.
save the republic:
revolution indeed. i think a general strike might accomplish a lot. consumers have a lot of power if it could be channeled.....
MGMCF MGM ENERGY CORP 59318A100
Woe is us…we’re in a lot of trouble, blah, blah, blah… it’s a god damn amusement park. A circus, a carnival, a traveling troop of acrobats, storytellers, dancers, singers, jugglers, sideshow freaks, lion tamers and football players.