scholastica8

'Index Speculators' Responsible For Commodity Prices?

I think the big question that all are missing is this:

We all tend to be comparing past commodity bubbles (oil, silver, etc) to the present situation. But, is the present the same as the past? We are looking at it from a very insular POV. From the end of WW2 to about 1970, the US was the only game in town. Between 1970-2000, we saw the rise of rival economies, but small potatoes on the whole... they had neither super populations, nor super wealth based on a commodity the world needs.

Is this really deja vu all over again, or have the super-population countries now begun to have a major sucking sound & are the growing appetites of oil-producing countries limiting the amounts of oil they wish to part with?

Someone above said that with US use declining, those supertankers would be sitting offshore waiting to unload. Is that still true? Or do they now have a girl in every port? Have we reached the point where whatever we don't use, someone else will?

Then, we come to the question of how long can the world economy bear the inflation that this will cause? The single thing that the global economy depends upon is cheap & easy transport of goods.

Some will say, that we will simply pull back to local production of foods & goods. Somewhat maybe. However, one of the reasons we went to a global economy was in order to provide resources or goods made from resources to areas that did not have those resources.

At some point, the scale must tip, but then what?

In Light of Peak Oil, Financial Diversification Is a Bad Idea

My brain says you're right.

But, as a Californian, my gut says that it's Enron revisited... & the world is being gamed... at least by 50%. My portfolio has not been very diversified in a long time. I've tended to energy, mining, food, infrastructure. Those are things that I can get my mind around.

However, I'm beginning to have those butterflies in my stomach that I tend to regret when my brain says put them on ignore. Those butterflies are warning that we'll see another energy crash like in the early 1990s.

It benefits all of these oil producing countries from Iran to Venezula to Nigeria to Saudi Arabia to slow the tap & skew their figures to the worst case scenario. But, it's a tight rope that they walk. They'll open the taps, oil will flow, & we'll revert to same ol' same ol'... but at a somewhat higher price.

The real question is how many times will we go thru this scenario with peak oil?