MMMPARSLEY1

Natural Gas ETF: Nowhere to Go but Up, Yet It Keeps Going Down

Fantastic Post.

But Natural Gas Isn't Oil. It's not as much directly effected by the rise and fall of the US Dollar as the supply and demand is domestic. Of course, if people have less to spend and less accessibility to borrowed money, they may not have as much discretionary and non-discretionary income; but I'd argue that the price people will pay to heat their home in winter will not decline at the pace of deflation - if that is the eventual macro-economic result.

Lastly, deflationary forces would have to knock down the price of drilling by 50% before most drillers would be able to operate on any margin at all. This winter will find extractions down, with consumption likely to be up as prices are low. The eventual result could be a price spike with production stuck and demand fixed.


On Jul 10 08:03 PM Did U Think The Ponzi Scheme Would Last? wrote:

> Any of you guys ever hear about this thing called deflation that's
> going around? If not, time to read up on Prechter who predicted
> this would all happen well in advance. The money supply is the monetary
> base that we all hear about the fed debasing but it is also credit
> (and its brother, debt) that the fed HAS NOTHING TO DO WITH AND NO
> CONTROL OVER ONCE IT IS OUT THERE.
>
> Are you listening? The debt that the banks have been allowed to
> push into the money supply has inflated it FAR more than the fed
> could ever hope to. And now that debt is going bad. When the debt
> is written off, the money supply shrinks. Period. The fed has no
> control over it because the debt is a couple orders of magnitude
> larger than what the fed can print up.
>
> Some people think the fed can just print forever. China, apparently,
> does not agree. They made it clear to Geithner recently that he would
> not be allowed to do this without interest rates skyrocketing. If
> that is allowed to happen, home sales will plummet and housing prices
> will follow them down. This will trash the banks who are trying
> to hold the debt associated with overpriced homes on their books
> as if it will some day return to 2006 valuations. If interest rates
> go to 10% or more, home prices could see 1985 values.
>
> It's a catch 22 and the result is deflation. The fed is caught between
> a rock and a hard case (China). Commodities have rolled over for
> the next wave down.