Ramrod

Is Oil a Bubble? Part One

I amazed to see the number, and certitude, of pontifications from the peak-oil-evangelists here. Unfortunately, the fact is there is simply a massive amount of crude out there that is profitable to produce at $100/bbl. Collectively speaking, you have no idea of what you are talking about if you insist that supply is "inelastic".

Without ANY DOUBT, this bubble will pop. How high it goes before it does I have no idea. But based on the sheer number of ignorant rants proclaiming there is "No Direction But Up Forever" it is clear this bubble will be a whopper. Unfortunately, if it pops later rather than sooner it may even be The Whopper.

The issue isn't that oil has spiked and is BY GOSH GOING HIGHER. The issue is that by setting energy policy based on irrational fears of theoretical ecophobic circumstance we have caused energy to spike BY SENTIMENT ALONE and have thereby created an environment of extreme uncertainty regarding future CAPEX not only in the oil patch, but the entire energy sector. The result is now Shortage-By-Fiat with prices dictated ever-higher in the commodities pits with the net result that major sectors of the economy are now in extreme jeopardy of collapse.

In other words, congratulations to all you left-wing energy scholars and self-appointed enviro-geniouses out there! You have literally worried us to death. Well done!

Yada, yada, yada. I can already hear the replies. The sky is falling, yada. Too many people, yada. Too much wealth, yada. Too many cars, yada. The world is ending in 18 months, yada.

Personally, I am going short against you and I will take your money when this does what it always does because I assure you that it is NOT different this time.