insideoil

Preparing for the Fall

Oil knows nothing - but the speculators chasing the price seem to know something. Just for the saying, what is short is refining capacity - not oil, and what is long are customers outside of the USA still willing (and I did NOT say capable) to pay for it. This can only break when a) subsidies on fuel start disappearing and b) countries start offloading their USD links, both directly in terms of currency and in terms of trade.
The markets will wobble and sway their way downwards as the pont of indifference between losing your cash on inflation or losing your capital altogether varies based on sentiments and manipulation of central bankers.
If you have the cash in hand - you may have to do a little hard work these days - and directly find, buy and manage companies with positive cash flow - using actual money. These are the only guys who will be the winners. The rest of us will be fleeced to pay off the bankers and the feds of this world - as they both need each other to survive, and they have the rules on their side to make sure they survive, and at your expense.
What is needed is a clear and delivered message of putting interest rates UP - to put some back into the US $. It will flush out the bad loans and all those who took a fat chance will pay for their mistakes and (unbacked) greed.
If this does not happen, it will be a slow slide to hell, and you will pay for it anyway in stagflation. However the bankers and the Fed will always prefer the slow boiled frog to the quick leap into the fire -the first way they get to stay in their jobs and plead that they had no choice. The result is the same - but the process even more protracted and painfull. Easy money is over - the system is striking back. Have an nice day.