Doc 224899

Dr. Stephen Leeb on Commodities and Inflation - Is He a Genius or Alarmist?

The way I read Game Over, Leeb explains the deterioration of our systems of banking and finance as the consequence of the decline in real estate values, and the consequence the people designing mortgage and derivative instruments as having bet that a decline in real estate values would never occur.

The market crash was ultimately due to Peak Oil effects, but the proximate cause was the decline in real estate values.

Leeb is a genius, and he's relying on facts, though he isn't correct about every little detail that he discusses or about every element of timing that he discusses. Nobody could be. As for the broad strokes and the assessment of fundamentals, Leeb is strikingly accurate.

Leeb is also correct about a bunch of other notions that will help you beat the market, if you can understand them well enough to apply them consistently well in unique and unpredictable situations.


On Jun 22 07:23 PM semsem wrote:

> He did not predict the recent market crash. He said the market would
> crash because of $200 oil. Not because of leverage / housing.

Dr. Stephen Leeb on Commodities and Inflation - Is He a Genius or Alarmist?

Great article. I'm on page 132 of "Game Over", and have been reading and re-reading Leeb's "The Coming Economic Collapse" for the last 2 1/2 years. I also read "The Limits to Growth" by MIT and the Club of Rome in 1972, which Leeb quotes in "Game Over".

One distinction Leeb makes is between integrated oil companies, which he discourages people from investing in, and oil services companies, which he recommends.

Best Investments for Rising Oil

The numbers and the fundamentals all point to one stock: PBR. If you care about the fundamentals of oil services, PBR gets the nod because they control 85% of the deepwater offshore exploration and production rigs in the world. If you care about the fundamentals of production, PBR again gets the nod because their government supports and protects the oil company and makes it easy for PBR to make profits.

By comparison, XOM is based in a country that resents XOM's success and leadership in the sector (blame the media and the government for this silly attitude), where the government favors plaintiff's attorneys more than corporations that satisfy basic needs, and where the government taxes XOM ruthlessly after the Kings of Torts are done with it.