David Lentz

Why It's Going to Be a Long Recession

"... Kinda makes the war in Iraq seem cheap, doesn't it ..."

Nope. Not even a little bit. Even the grand gesture to bail out the Chinese, Japanese, and PIMCO is small compared to the amount we are burning in Iraq in order to ... ?

Oh yes, keep the terrorists over there.

But what about the terrorists in Washington?

Crude Oil Seeks Iranian Black Swan

xander, check out:
crooksandliars.com/200.../

It was not weapons grade uranium.

While doubtless Saddam had dreams of developing the infrastructure to make it weapons grade, it would have taken decades for him to achieve that, and even longer to turn the dreamed-of weapons grade uranium into a bomb.

There was no threat, and it was not a secret, it was registered and tracked by the UN and every intelligence agency under the sun.

Repeat -- NOT A THREAT.

Bush remains a clueless idiot.

Options Trader: Wednesday Outlook

Gotta wonder where all this oil that is no longer being bought is going -- are the producers in the position of having to scale back production because nobody will buy cheap oil? THAT certainly doesn't sound right!

A clearer picture of how the futures markets operate, and the ability to "cancel" contracts impacts things (the oil represented by those contracts still exists, one presumes), is sorely needed.

Examples, please -- with pictures and arrows and words explaining it all, a la Alice's Restaurant!

Will the World's Central Banks Successfully Fight Inflation?

I think that there are only two paths here -- either the CB's fight to delay/mitigate inflation until effective alternatives to sky-high oil arrives, or we see the gradual collapse of western civilization, as all of its wealth (assets) are sucked away into the hands of the oil-producers.

Maybe a few will have clueless leaders (Zimbabwe, ... ?) who will churn the monetary printing presses and embrace hyperinflation (and inevitable collapse), but the vast majority will either dither and wither or raise rates to the brink of crushing their local economies (and we are a LONG way away from that) in hopes of slowing demand.

In either case, we ARE going to see price inflation, regardless of whether the CBs cave in to political pressure to stoke inflation to "mitigate" the price inflation with monetary inflation (a bad idea).

In the end, alternative energy solutions that make oil (and possibly coal) obsolete will arrive, in the forms of new ways to generate power, and better ways to conserve it. We have not even scratched the surface of what is possible in either area.

Worst case? Famines+wars bring on the Malthusian result, lowering the population to levels that the global economy can support.

Inflation Contest: Crude 1-Gold 0

A bit more timeliness would be helpful. Oil appears to have hit a (near-term?) peak and is now in retreat, although by how much is unclear, given that our alternatives to consuming oil are fairly restricted at the moment, and China+India will more than make up for any US+Euro conservation.

But gold is also firmly in retreat, as the Fed talks up the dollar and pretty much removes the possibility of further rate cuts. Gold appears to be on its way to 800, at least, before heading for its next milestone, and whether that is higher or lower than 800 is not clear at this point (but I'll bet it tests its recent highs at least once more before resuming a definitive path).

So the more timely picture is the question of which will fall faster over the next 2-3 months, oil or gold. Neither situation is one that clamors for increased investment.

2009 is another matter entirely. But we've got to have money left after 2008 to take advantage of whatever happens in 2009.

Gold and Oil Price Limits

Yes, yes, $2000 gold ... when? If it arrives after oil crashes for the last time, when I am growing potatoes in my lawn and canning fruits to get me through the winter without starving -- a winter that I'm cutting down the trees in my yard to burn for heat -- then I really could care less about gold, whether it's priced at $2000 or $200000.

As Keynes reminded us all, in the long run we are dead.

Matters of pricing are of interest to us only over the short haul.