Bill W.

Winter's Coming for the Boomers: Part 2

James, you said:
" Peak oil does not mean we are running out. It means we are discovering less than we are extracting. The easily obtainable fuel has been obtained. Now we need to use tar sand, shale, and deep water wells. To even undertake those projects at a profit you need $100 oil or greater. Demand will grow. That is a given. Supply will not be able to keep up."

Thank you sir for responding. I take exception with your statement that the "The easily obtainable fuel has ben obtained". If memory serves, it took about 5 years to construct the Alaskan Pipeline. I'm sure if this nation had the political will, the oil in Anwar and the natural gas stored in the ground at the north slope of Alaska could be made available in 5 years or less. Again, if memory serves, the oil companies obtained the permits for "right-of-ways" for the natural gas pipeline when they got them for the oil pipeline. Whether they did or not does not really matter, the point being the Alaskan pipeline was built in remote areas, so obtaining permits will be no big deal.

I think what is really needed is a comprehensive energy plan, one that uses a mix of energy resources until such time that alternative energy can be phased in as our main energy source.

I do agree with your premise regarding energy that if things don't change, this country is looking at a very bleak future. That is why we need a different perspective on this issue.

James, please let me say that your writing style is enticing, you do make one think, and I thank you for that.

















On Jul 14 01:58 PM James Quinn wrote:

> Peak oil does not mean we are running out. It means we are discovering
> less than we are extracting. The easily obtainable fuel has been
> obtained. Now we need to use tar sand, shale, and deep water wells.
> To even undertake those projects at a profit you need $100 oil or
> greater. Demand will grow. That is a given. Supply will not be able
> to keep up.

Winter's Coming for the Boomers: Part 2

James, with all due respect, I must disagree with some of your premises regarding peak oil. Yes, we do in fact have a peak oil situation if, and it's a big IF if you believe the oil companies numbers. Why do I make such a statement? It's because I've learned to never discount my own experiences.

Let me explain. In 1975 and 1976, I was a Project Planning Engineer on working for Brown and Root at the North Slope on the Alaskan Pipeline Project. I helped plan and schedule the gathering units (the pipes running from the wellheads to pump station number one and the separation units, the purpose of the separation units was to separate the natural gas, water, and oil, the natural gas was injected back into the ground, water was discharged into Prudue Bay, and the oil was sent to Pump Station One.

While at the North Slope, I stayed at the BP Hilton, a facility that provided lodging. While there I got to know more than a few geologists from Standard Oil and BP. Anyway, one evening over a few beers I made the statement that the world was running out of natural gas and oil. Well I had these guys ROFLAO. They were amazed that I was that naive. They essentially told me that there is enough natural gas and oil to last the lower 48 states for the next 500 years.

Too Much Supply, Too Little Support

Karl,

Excellent article, as usual! Just read some news the banks will be tickled pink to hear: The Government today announced that first time home buyers can, effective imediately, use thier $8000 tax credit to reduce the price of the home. So, instead of waiting until they get thier tax returns next year, the money will be used in the near term.

God help us all.

Home Prices May Be Nearing Bottom, Bank Equities to Follow?

Holy Moley! Now I get it! The fed is holding a huge amount of toxic MBS from the banks and the only way they can make these debt instruments viable is to induce inflation into the mix. If interest rates do, indeed go to 3.5 % then it is not a strech to see home prices increase at an accelerated level. For folks that have houses under water (mortgage greater than current market value) lower interest rates won't help much, but if low interest rates are sustainable, then the creation of a new housing bubble will certainly float all boats.

However, I think it is too early in the game to be placing any bets on housing. I think about six months from now, we will have a better picture of how things will work out.

Respectfully,

Bill W.

We May See Mortgage Rates Fall to 3.5%

Holy Moley! Now I get it! The fed is holding a huge amount of toxic MBS from the banks and the only way they can make these debt instruments viable is to induce inflation into the mix. If interest rates do, indeed go to 3.5 % then it is not a strech to see home prices increase by quite a lot.

Dennis Gartman: Go Long Infrastructure, Short Everything Else

Sir, your basic premise is seriously flawed. The Obama plan does not see spending a trillion dollars on roads, bridges, schools and general infrastructure building. It includes a host of other projects such as nuclear, IT, and alternative energy to name just a few. Not to mention the Alaska Gas Pipeline. Sure, there will be some new demand for steel, but it is difficult to say how much. The problem with forecasting is the lag time involved from the start of a project to procurement of commodities.

G-7: Nothing New

Gitridofthemnow; Thanks for your simple and elagant explanation of why 700B is not enough to bail out the banks.

The question I have now for you is this: Ben B. told congress that the banks can't be bailed out at fire sale prices, like Lehman's, for instance but thier OTC's should be somewhat (held near maturity) higher so that the American tax payer can make some money on this deal when a higher value is reached in the future. So, how much money do the banks really need to make this happen?

And, let's say they get more, won't this cause the USD to lose value against all currencies. On the other hand, if this is indeed a world wide banking crisis, and there is no doubt that it is, then banks world wide, and not just the US will have to add liquidity so would'nt things just balance out?

Thanks In Advance For Your Reply,

Another intellectually challenged individuall.

Bill W.

Is Inflation a Clear and Present Danger? No Way

You really need to get out more often.

Is Inflation a Clear and Present Danger? No Way

You really need to get out more often.

The Cyclical Nature of Markets

Thanks Bill for another fine article. My focus is on gold as I do not see it as a commodity but rather as a currency. My take is that the recent slump in the price of gold is a great buying opportunity.

I also think the major gold producers will be buying up juniors as thier stock is being beat down in this market. I'm trying to evaluate which junior would be a good take-over target. So, this brings me to this question: Do you (or anyone reading this) know of a web site that lists the majority of the juniors?

Respectfuly,

Bill W.

Depressing Summer Reading

Larry, thanks for your list. I strongly suggest you do, in fact, read one or two of these books. I recomend " When Markets Collide, Mohamed El-Erian" as a must read. I also suggest you take a peek at jsmineset.com for daily comentary by Jim Sinclair. Jim's credentials are impecabble (he was on the short list as a nominee for Sec. of the Treasury during the Nixon regime). And, he has over 35 years of experiance in the gold and stock markets.....the bottom line on this guy is that I listen to what he has to say because he know what he is talking about.

It is only when one has educated one's self will it be the time when he cannot be fooled by the media fools.

Respectfully,

Bill W.

The Recession Began in Q4 '07, Is the End Near?

Tim, you really need to get out more often.

Building Your Portfolio for the Next Bull Market

I'm sorry I can't answer your question regarding the state of repair of the pipeline simply because I have not been paying much attention to lately.

I believe that our economy is in a lot worse shape than the media has led us to believe. I live in the historal section of Jacksonville Florida, a section of town that is in transition from being run down to being upscale. Anyway there are half way houses that provide room and board for $97 a week......a year ago there was a waiting list to get into these places. They now have a vacancy rate of 33%! The folks tell me that even a lot of the day labor pools have gone out of business. It makes me wonder where these folks are living.

Building Your Portfolio for the Next Bull Market

Thanks galewhitaker for sharing your thoughts, I believe you do indeed, have it right. I'm a retired Project Planning Engineer, in fact I was one, of many, planners on the Alaskan Pipeline. I helped develop the plan and the schedule for the gathering units ( this is the equipment that goes from the wellheads to the separation units. I also helped develop the plan and schedule for the separation units. The separation units separate out the natural gas, which is injected back into the ground for future retrival, water is separated and then piped into Prudhoe Bay, and the oil is sent to pump station 1 to wind it's way through the pipeline and ends up in Valdez in tank farms waiting for shipment off shore.

You are absolutely right about how is priced and how most, if not all of the oil on the TAPS is sent to Japan.

A point most folks don't take into consideration is the lead time it takes to bring major projects on line, the Alaska Pipeline was years in planning and if memory serves took about 8 years for the design,
manufacture and construction.

Respectfully,

Bill W.

Is Fed Rate Policy Affected by Election Year Politics?

Kathy,
This being an election year is irrevelent. If ther fed lifts rates then the housing market will crash. Ben is currently between a rock and a hard spot.......he can't actually raise rates because of the impact on the housing market and he can't lower rates, because of inflation, all he can do is what he is doing.....jawboning.