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Guest Post: Oil Juggernaut Unleashed

Tyler Durden's picture


Submitted by Giordano Bruno of Neithercorp Press

Oil Juggernaut Unleashed

The prevalence of crude is undeniable. You might dabble in
green-think cultism or you might drive an obnoxious monolith of a Hummer
(what I like to call an “overcompensation-mobile”), but neither
philosophy of consumption dares to contradict that this world runs on
oil. Petroleum is used in the manufacture or shipping of almost every
industrial product on the planet, and even many agricultural goods.
Therefore, it behooves the public to seriously consider the
ramifications of oil price and its underlying effect on the entirety of
our economy. Even minor increases holding over an extended period of
time cause economic reverberations that can be felt for years
afterwards. Financial and social adjustments to commodity inflation can
sometimes take decades if the event is historically unprecedented.
Petroleum is a foundation ingredient, it is energy itself; the higher
its cost, the greater the cost of every other product we use, and the
worse off our financial structure is. Period. There is no scenario yet
experienced by any nation in which oil inflation actually benefited the
masses or the overall economy, even in countries that sell oil!

Americans have had a small taste of the tensions involved in an oil
crisis, during the 1979-1980 Iranian snafu, and the massive gas spike of
2008, but these events are nothing compared to the steamrolling
inflation we are soon to see at the pump in the next couple of years.
Let’s examine why…

OPEC Ready To Let Oil Run Wild

At the writing of this article, oil stands at around $91 a barrel,
still below our prediction during the summer of $100 by the end of 2010,
but already a 30% increase over the $70-$75 average we enjoyed in the
middle of the year. Anyone who believes that prices will even out or
fall over the course of 2011 should take note of the heavy press
coverage on the statements from OPEC representatives over the past
couple months. The Middle East has made it quite clear this winter that
$100 a barrel is not just possible, it is a certainty:

The illusion underlying the OPEC statements, however, is that the
current price rise is completely under their control. This is not the
case. In fact, the nearly $150 a barrel plateau we witnessed in July
2008 will seem like a quaint memory not long from now, primarily because
the factors involved in today’s petrol valuation are much more systemic
and violent; rooted in a snowballing devaluation of Western currencies,
instead of the traditional influences of supply, demand, or even

The recent comments of Kuwait’s oil minister that “the global economy
can withstand $100 oil” are, of course, also disingenuous on a couple
levels. First, the global economy is in dire straights and riding the
wave of a convoluted “recovery” built on fiat and fantasy. $100 oil
will only bring the illusion crashing down as the public realizes the
true effects of long term inflation in prices, and the sales of goods
begin to falter even further than they already have. Second, oil will
NOT stay at $100 for very long, so the suggestion that we can
“withstand” such a price is rather irrelevant. Essentially, OPEC is
losing its ability to reign in or stabilize gas at a reasonable cost due
to the crumbling dollar, and so, they have decided to raise rates to
offset dollar devaluation while attempting to change the definition of
what “reasonable cost” is. They admitted as much back in October:

The key here is the dollar and its inevitable demise, which the
establishment is trying desperately to hide until the last possible
moment. Over the next year we are likely to be buried in a deluge of
excuses, half-truths, and lies, all meant to divert attention away from
the word “inflation” as the masses begin to question just what the hell
is going on.

The Real Reason You Were Robbed At The Pump

Many factors can determine the ascent of gas prices, and this is
where confusion arises in today’s market, and propaganda begins to take
root. In 2008, the historic march of oil costs was blamed primarily on
“speculators”, commodity investors who buy up petroleum with no
intention of actually using it, thereby creating a false sense of
scarcity in the market and driving up prices artificially. This was,
for the most part, what really happened.

Another cause of oil increases is the natural reduction of global
supply in the face of rising demand. An American economy running on all
cylinders would necessitate greater supply and a higher price if that
supply is insufficient.

Essentially both triggers are dependent on the fact of scarcity,
engineered or legitimate, in order to cause price spikes. Neither
trigger is applicable in today’s market, where currency weakness is the
central determinant, yet these are the arguments we are hearing and will
hear more of as we are fleeced at the pump through dollar devaluation.
Below are a few MSM articles which promote the supply/demand tall-tale,
including announcements by the IEA (International Energy Agency)
claiming that economic rebound is the culprit:,0,6876017.story

The “recovery” argument in terms of oil demand is obviously laughable
to those of us in the Liberty Movement and alternative economic
research, but to those who base their entire view of our financial
health on the meanderings of the Dow, recovery certainly seems

The truth is that the stock market is the LEAST reliable indicator of
economic strength, especially during major fiscal downturns. The Great
Depression was blatant proof of this, but the smoke-and-mirrors magic
show has been elevated to a new level today by the introduction of
quantitative easing measures by the Federal Reserve. Most intelligent
financial analysts have been crying foul for a couple years now over
these monopoly money injections, and have pointed out that a substantial
portion of the funds are being pumped into stocks in order to create a
zombie market; a kind of “Night of the Living Dow”, a market that has
diminished real investment and relies almost solely on constant
formaldehyde-like fiat transfusions from the Fed and the government.
In fact, Charles Biderman of the investment research firm ‘TrimTabs’
recently announced on CNBC (of all places) that after two years of
investigations into capital inflows into stock markets, his conclusion
was that retail investors have quit stocks, and the only thing holding
up the Dow today is the Federal Reserve itself:

This shows that the stock market indexes cannot be trusted to glean
proper information about recovery (or a lack thereof), but what about
other indicators? The Consumer Metrics Growth Index, produced by the
Consumer Metrics Institute, is a proven leading indicator of GDP and of
market movements. Its accuracy is owed to its close tracking of
consumer spending, not just in retail stores, but also web sales.
Consumer spending makes up about 70% of the U.S. economy, and is thus a
much more reliable litmus test for overall financial health than
manufacturing data, which is what the government has been using to gage
current growth and future trends since 1937 (back when manufacturing
actually counted for something in this country). This means that the
Consumer Metrics method is far more up to date with the functions of the
modern American economy. According to the CMI index, the U.S. has been
on a negative growth curve since the end of 2009 which is equal in
severity to the credit collapse of 2008, but much longer and more

As you can see in the chart above, whatever recovery we thought we
had in progress during 2009 ended quite abruptly, a temporary jump in
economic activity likely inspired by the printing press free-for-all
initiated by the banker bailouts. How many trillions were pulled out of
thin air and dumped into corporate banks and stocks just to conjure
than one short lived moment of false hope? We still haven’t received
total disclosure from the Fed on this, nor will we until a full audit is

Remember housing values? That vital gauge of U.S. economic health
that mainstream media pundits have been calling a bottom on every month
for the past two years? Well, prices still haven’t bottomed yet, and
now they are expected to decline continuously through 2011:

What about durable goods? That market should be hopping if a rebound
is in progress, right? Nope. Durable goods are experiencing a
substantial decline, similar to that which occurred during the plunge of
late 2008 and early 2009:

So, to get to the point (as if it is not painfully obvious); there is
no recovery! I don’t care how often CNBC, MSNBC, FOX, or CNN, pull
skewed data and automaton analysts from their ghastly dungeon of
disinformation, the fundamental dysfunctions of the American economy
remain unchanged. Therefore, it is outrageous to insinuate that a
“recovery” is to blame for rising oil prices.

The next natural step in the rebound contention is to suggest that it
is actually a heightened demand in the burgeoning economies of
developing nations like China that is driving crude values to the max.
That would be a clever redirection IF one could show that Chinese
economic policy was having a meaningful effect on crude markets. In
reality, the latest Chinese policy changes (which effect the consumption
and demand of the entire country) have had little sway over most
commodities, including oil.

A perfect example is the recent surprise Christmas announcement by
China that their central bank would be raising interest rates yet again
in a vain attempt to combat price inflation. Rate increases usually
signal to global investors that capital flows will tighten, and less
money will be available in the system, meaning demand will fall and so
will prices. Mainstream pundits for the most part called for a negative
effect on commodities, especially oil. No such effect occurred. In
fact, gold has spiked in value and oil has held strong at $91 a barrel.
If Chinese demand was the primary cause of oil inflation, then such an
announcement should have made some kind of visible impression on crude,
but nothing came of it…

Oil consumption in the U.S. imploded in 2008, 2009, and 2010:

Oil consumption around the world suffered a severe decline in the third quarter of this year:

OPEC has stated that there is no supply shortage and that wells will
run at current capacity. The data seems to support their claim. There
is no scarcity of oil, and demand has only fallen over the past three
years. So, what is causing crude values to rocket towards $100 a

There Will Be Blood

Since oil is widely traded in dollars, it is perhaps the commodity
most sensitive to dollar inflation. If supply and demand (real or
imagined) are not the acting players in the current oil climb, then we
are left with only one other option; currency devaluation. As we have
covered in past articles, commodities across the board are tearing
towards historic highs, while global demand for goods continues to fall.
Oil is no exception. Establishment economists in the U.S. and in most
of Europe have avoided the dollar collapse issue like Lyme disease, but
other nations around the world will not. OPEC has been expressing
concerns over dollar weakness and openly suggesting dropping the dollar
peg since 2007:

In 2008, the U.S. government was fully aware of discussions by Arab
nations to depeg from the dollar and move to a basket of currencies
(think SDR’s), and even “greenlit” such decisions by suggesting we “did
not necessarily need Gulf support for our currency”:

In an investment conference in Saudi Arabia in 2008, Alan Greenspan
himself suggested that Gulf States would be better off dropping the

In 2009, writer for The Independent, Robert Fisk, reported that he
had received insider information that OPEC nations along with China,
Russia, Japan, and France, were engaged in rather clandestine meetings
in an effort to drop the dollar for international oil trades:

Little credence was paid to this report by most of the MSM, but today
China and Russia have already dropped the dollar for all bilateral
trade. How long would it take to position a country to decouple from
the dollar, from planning phase to implementation? Two to three years
perhaps? With the Federal Reserve’s QE2 in full swing, I believe OPEC
nations will soon follow. The dollar peg would otherwise ravage export
dependent countries, especially oil producers.

Extreme oil prices pummel more than just our wallets; they also
strike our cultural psyche. Those people who found a way to ignore the
signs of economic collapse until now will discover that they cannot
avoid the icy reality of the gas pump. When those digital dials spin
past the $5 mark before pouring out even one gallon of unleaded, I
suspect people will be generally pissed. This is why the establishment
media is oozing with oil disinformation and demand rhetoric now. It is
an attempt to “vaccinate” the masses against inflation in the future; to
redirect their anger towards a false cause and effect scenario. It has
long been my concern that the speculation induced gas spike of 2008
was, in fact, a deliberately engineered event; a staged price vault
meant to condition Americans to passively tolerate the very real dollar
disintegration and hyperinflation which would eventually occur later
down the road. When crude prices race towards $150 a barrel once again,
does anyone really doubt that the MSM will bring up “speculators” as
the villain? And, more importantly, does anyone doubt that the rest of
the world will blame the actual trigger; the fading Greenback?


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Wed, 12/29/2010 - 07:20 | 835310 gwar5
gwar5's picture

The necronomy is just fine!

Wed, 12/29/2010 - 07:53 | 835321 Malcolm Tucker
Malcolm Tucker's picture

Yes it is "just fine". After all, there couldn't be anything wrong with a system that lets 

ONE SECRET SENATOR derail a government whistleblower protection act that everyone else voted for:

Oh and Germany is considering Israeli style profiling! Talk about flashbacks! WTF!


Wed, 12/29/2010 - 08:37 | 835351 gwar5
gwar5's picture

Secret Santa: Murkowski

Wed, 12/29/2010 - 08:46 | 835354 CitizenPete
CitizenPete's picture

Simply more fundamentalist state tyranny packaged in a gift box with a security blanket and a toxic pacifier.  Stay warm and suck it.

Wed, 12/29/2010 - 09:10 | 835373 the not so migh...
the not so mighty maximiza's picture

Real news not on MSM.

Wed, 12/29/2010 - 09:59 | 835448 Husk-Erzulie
Husk-Erzulie's picture

wtf?  Now that is interesting indeed.  Since when do Senate rules include the "secret hold" I wonder?

Wed, 12/29/2010 - 11:02 | 835557 benburnyanki
benburnyanki's picture

Miss Merkel must give a horendously terrible blow job to the Israelis since she has had to cough up so many free shiney new u-boats that Israel uses to threaten the rest of the world to do what Mossad says or big I will nuke them. I am so sick of Israel beating up Germany like their bitch after the Rothschilds (Israel was funded by Rothschilds in 1930 so a Rothschild is on the Israeli 500 shekal dollar bill - not a dead president). Not only that, Rothschilds funded Hitler via BIS Swiss bank the full length of war to keep Nazis going 6 years to scare all the Jews in to trying to grow crops in their new home Israel that Big R had just bought them. No jew is stupid and they would never have moved to Israel and started shooting Arabs who's Sharia Law forbids Interest Lending, but Makes Big R Big Bucks.

So not only is Oil spikes bullshit, but every major economic and political event is a con job and u need look no further than Big R's Big Nose to find the culprit. The R's own all shares in all oil firms via secret offshore irrevocable trusts sheeple.

London's Rothschild banking beatches have been chaining up the Fed and ECB and BofE to the po' folk who have no money in the bank earning interest for 800 years since banking was invented in Italy. What an astonishing coincidence that England has been running point man against all wars against Arabs ever since as Arab Sharia Law forbids Interest Lending.

The Rothschilds are the Jew Mafia Dons. Jewish/Russian Mafia has taken over the world and especially the USA. All Bush's cabinet was Jewish. Hollywood is Jewish Mafia controlled. Banks are Jewish Mafia controlled. Universities back East are Jewish Mafia controlled. FBI, CIA, NSA, DEA, DHS, EPA, FDA, FCC, and Treasury are all Jew Mafia controlled.

Mayer Lansky Jew Mob Boss ran america, not the Sicialian Mafia folks. 80% of Russian Mafia are Jewish so Putin ROOOOOOOOOCKS for putin Khordokovsky in Siberian Prison. It was Khordokovsky who was driving that front end loader!!!!!!!!!!

We are so f**ked its not funny and all the crazy bitches that had babies in a world run by the Mafia are Mafia Dona Pigs who only care about what goes in and what comes out of their little fat asses.

Having babies around Mafia like smokin' cigarettes in gunpowder factory!

Now repeat after me: this is my rifle this is my gun, this one's fer mafia, this one's for cun(t).

Ben Burnyankee say: "We wacked Jesus & JFK for Bank Bustin' and walked, and have a 40 foot container of Gringo Bar-B-Q sauce"

Read Best Bank Book "None Dare Call It Conspiracy":

Video shows CIA & LAPD Import Cocaine:

Wed, 12/29/2010 - 12:41 | 835796 tamboo
Wed, 12/29/2010 - 14:27 | 836037 Pseudo Anonym
Pseudo Anonym's picture

you really need to refocus your effort on the big picture. Who cares about the likes of Rothschilds etc. They are and always will be nothing more than hofjuden that betray jews and sent them to gas chambers at the drop of a coin whenever their master orders them. Jews are planted, stupid decoys for the likes of you to bitch about them so the puppeteers can continue pulling strings from behind the scenes to accomplish their goals. You need to figure out who "the man" is to understand what's going on. And let me assure you, the "man" is not a jew. He most likely comes from the ranks of your tribe - judging by the position you're taking. Long live vatican and the jesuit order!

Wed, 12/29/2010 - 07:37 | 835322 TBT or not TBT
TBT or not TBT's picture

Indeed, The Night of the Living Dow sounds about right.

Wed, 12/29/2010 - 07:54 | 835335 malikai
malikai's picture


Wed, 12/29/2010 - 09:41 | 835422 High Plains Drifter
High Plains Drifter's picture

Don't worry about it. Our Chinese made junk has been flying off the shelves. What me worry? Ha ha ha



Harry Wanger.

Wed, 12/29/2010 - 10:07 | 835464 SheepDog-One
SheepDog-One's picture

'Necronomy', sums it all up perfect.

Wed, 12/29/2010 - 07:23 | 835311 Alcoholic Nativ...
Alcoholic Native American's picture

Fuck you.

Wed, 12/29/2010 - 07:32 | 835314 BigDuke6
BigDuke6's picture

OPEC are liars who despise the west.

They manipulate production to suit themselves and no one else.

after ww2 the whole middle east should have been annexed and pumped dry. 

then we could still have had our goddam V8's filled up for 20 bucks.

until at least 2025...


Wed, 12/29/2010 - 07:38 | 835323 snowball777
snowball777's picture

I love the smell of ignorance in the morning.

Wed, 12/29/2010 - 07:50 | 835332 luigi
luigi's picture

I hope BigDuke meant to be sarchastic...

Wed, 12/29/2010 - 08:02 | 835341 snowball777
snowball777's picture

I believe he did (as did I).

Wed, 12/29/2010 - 13:50 | 835961 DaveyJones
DaveyJones's picture

manifest destiny will get the best of me

Wed, 12/29/2010 - 07:44 | 835327 TBT or not TBT
TBT or not TBT's picture

Annexed, no, but a serious application of old school british empire style imperialism would have been nice, to impose modernity, rule of (non-sharia) law, capitalism, schools, armies worth a flip, and much else.    Instead we have these tyrannical population-overshoot basket cases where reciting the quoran passes for basic education and oil money brings bucks to prop up the tyrannies and crazies alike, and keep the women wrapped up, locked up, and ignorant.    Nothing like a solid century of imperial occupation to throw down on ancient backwardness.    Just ask India.    Two centuries under the british empire.

Wed, 12/29/2010 - 07:52 | 835334 Alcoholic Nativ...
Alcoholic Native American's picture

Sharia law = law law

Why is the west so afraid of the rule of law? And more absurdly, convinced it is bringing it to other countries through imperialist crusades?

Wed, 12/29/2010 - 09:36 | 835418 MobBarley
MobBarley's picture


Sharia law, much like any other codified system of law with a minor l, is what men compose when their subconscious knows they cannot fulfill the Golden Law.


Wed, 12/29/2010 - 10:08 | 835466 SheepDog-One
SheepDog-One's picture

NICE reply MobBarley!

Wed, 12/29/2010 - 10:41 | 835514 tmosley
tmosley's picture

EXCELLENT post.  There is a huge difference between the law and legislation.  

Laws are not made by men, but exist within us as a function of a very simple set of rules that inform complex behavior, namely that one has a right to self ownership, and a right to property.  Others describe it as the right to life, liberty, and property, though I would say that the second is derivative of the first, and the first is derivative of the third (through self ownership).

I am not a religious man, but if there is proof of God anywhere in the whole of the universe, it is there, in those rights.

Wed, 12/29/2010 - 14:59 | 836144 Clycntct
Clycntct's picture


"right to property"

I was looking at a little popup image on top of the crocodiles head as he was chomping the gazelle.

I have a right to lunch.

Wed, 12/29/2010 - 10:46 | 835527 Alcoholic Nativ...
Alcoholic Native American's picture

Listen you jackass, who are you to school me on the golden rule?

Wed, 12/29/2010 - 11:41 | 835633 luigi
luigi's picture

Would you be pleased to be called jackass yourself?

Wed, 12/29/2010 - 11:53 | 835667 Poofter Priest
Poofter Priest's picture

Anybody that starts touting (particularly) Sharia law needs schooling.

Wed, 12/29/2010 - 09:36 | 835419 Revolution_star...
Revolution_starts_now's picture

"Sharia law = law law"

Screw Sharia law and screw Christian law while your at it.

I am sick and tired of stupid people and their weak ass, made up gods.

What did Carlin say?

This is the work of an omnipotent god, this is the best he can do? This looks like the work of an incompetent god to me. Religion is a mental disorder and serves but one purpose, to control.

Matter of fact I'm sick of "law" in general. If it doesn't apply to every swinging dick, then it's just another form of control.

I think it's time we gave Anarchy a try, I know I would fair better under anarchy and the oligarchs wouldn't last a week. Let's give that a go for a while, until the oligarchs are gone anyway.

Wed, 12/29/2010 - 10:43 | 835519 stewie
stewie's picture

Love Carlin.  

Problem with Anarchy is that ppl quickly regroup and organize and start killing and stealing each other's stuff.  But some scheme involving decentralization of power is certainly a good way to go.


Wed, 12/29/2010 - 12:16 | 835739 Seer
Seer's picture

"Problem with Anarchy is that ppl quickly regroup and organize and start killing and stealing each other's stuff."

How is it any different with mainstream govts of today?

As you probably grasp (many do not), centralized govts brought us massive systems for murder (and theft).

Wed, 12/29/2010 - 11:46 | 835523 KickIce
KickIce's picture

George Washington:  Man can not govern properly without God and the Bible.


Wed, 12/29/2010 - 12:30 | 835772 Seer
Seer's picture

Believe me when I say that I lie...

If man is unable to be trusted, then how can we trust man to tell us that "God" and the "Bible" are to be used/trusted?  How is a paralized deaf and dumb person (created by "God") supposed to understand/follow the "Bible?"

Do I follow YOUR interpretation of the words?  I mean, when it depends on the definition of "is?"* (*Given that the US was chosen by "God," and that any US president is therefor picked by "God" [if not, then is "God" slacking on his job?], and one of "God's" leaders cannot even define the word "is," well...) (and then there was GWB, but I won't go there- a sure embarassment to "God")

Wed, 12/29/2010 - 12:53 | 835829 KickIce
KickIce's picture

The principle are there for all to read.  You've got the 10 Commandments, the 2 Great Commandments, the Sermon on the Mount not to mention the parables that Jesus taught.

That being said, man is given the agency to choose for himself.  We choose not only the way we live but also those that lead us.  Unrighteous people have a tendency to put unrighteous people in power and you have to look no further that DC to prove this out.  Bottom line, God has given us freedom and the framework for success but we are pissing it down the drain.

Let the junks commense.


Wed, 12/29/2010 - 13:41 | 835931 PRO.223
PRO.223's picture

Exactly right KickIce

Wed, 12/29/2010 - 14:30 | 836070 colorfulbliss
colorfulbliss's picture

Oh please do tell of this righteous person that was put into power by those who are righteous in recent history......


That's what I thought.



Wed, 12/29/2010 - 10:50 | 835537 tenaciousj
tenaciousj's picture

I would argue that the majority of people want, and some perhaps need someone to lead them.  Be it a king, commitee or whatever.  They simply have no desire or ability to put forth the effort to take resposibility for the direction of their life and would rather just leave that part up to someone else.

I've yet to understand why so many people here call for anarchy and the collapse of everything.  Like some magical utopia will spring up from the ashes.  If history is any lesson we will probably end up with something much worse in its place.

Wed, 12/29/2010 - 12:40 | 835797 Seer
Seer's picture

"I've yet to understand why so many people here call for anarchy and the collapse of everything.  Like some magical utopia will spring up from the ashes.  If history is any lesson we will probably end up with something much worse in its place."

Anarchism places no prescribed methodology on anything, other than it advocates that power is not to be concentrated.

The falacy of those who support the status-quo aways is, and always has been, that it's the best that is or has ever existed.  It's a programmed belief by those in power, to keep them in power.

Anyone that thinks that the current "civil" projections will produce a better result than a near infinite set of options via anarchism is, well, only fooling themselves.

Anarchism does NOT mean chaos.  Again, look around and ask whether the current system(s) are leading us away from chaos.  I'd argue that they are not.  I'd also argue that it would be far more likely that anarchism would produce more free-thinking people (who could adapt to our changing environment) than the current system does: the current system is painting us into a corner with its continual pursuit of "conformity."

Wed, 12/29/2010 - 11:08 | 835568 Bryan
Bryan's picture

"Anarchy in peace" is certainly a noble pursuit, but wholly impossible in the real world.  Human ego and pride gets in the way and messes it all up.  Refer back to the Bible again about what do to with human ego and pride.  ;-)

Fri, 12/31/2010 - 17:05 | 840352 Katharotes
Katharotes's picture


"If it doesn't apply to every swinging dick, then it's just another form of control."

lol, indeed, indeed....

Wed, 12/29/2010 - 07:59 | 835337 malikai
malikai's picture

Yea, good luck with that. I'm sure they'll just love being colonies to a bunch of crooked white people again. They always enjoyed that sort of thing.

Wed, 12/29/2010 - 08:09 | 835344 snowball777
snowball777's picture

You've got a serious case of the stupids if you can't recognize that the fucked up world you see before you is the end result of 'british empire style imperialism' and its abject failure along with the idiotic actions of the US from the first half of the 20th century until now (Kermit Roosevelt?). Most, if not all, of the major conflicts on the globe were inspired by British meddling and trebly so in the ME, Af-Pak, and India.

Wed, 12/29/2010 - 09:07 | 835372 Calmyourself
Calmyourself's picture

British style imperialism was a mixed bag.  No one can seriously argue that their border setting policies were not maniacal or did not contribute or eve n cause future conflict.  However, ther administration skills initially imposed and then adopted created a system for countries to evolve around and through. 

Wed, 12/29/2010 - 10:36 | 835508 hedgeless_horseman
hedgeless_horseman's picture

They've taken everything we've ever had...and not just from us...from our fathers...

And what have they ever given us in return?

Wed, 12/29/2010 - 10:22 | 835492 Byte Me
Byte Me's picture

So we're going to forget about any contribution to global 'development' made in C20 by communism, corporate consumerism and the two teensy weensy Global Wars perpetrated by good old Deutchland.

Gee snowball, that's right white of you to blame it all on the British Empire.

Homework for tonight: (i) 3-page essay on the circumstances leading to The Great War and its consequences for the British Empire.

(ii) WWII - discuss who the aggressors were and why.


Wed, 12/29/2010 - 09:21 | 835400 AnAnonymous
AnAnonymous's picture

imperialism would have been nice, to impose modernity, rule of (non-sharia) law, capitalism, schools, armies worth a flip, and much else.   


Just like Japan benefited from.

Oh wait, Japan modernized out of colonization while the rest of the world was colonized.

Colonization is a factor of backwardness.

Wed, 12/29/2010 - 10:52 | 835535 tmosley
tmosley's picture

Not backwardness, but socialism.  Those societies which embraced socialism were colonized by more powerful capitalist societies.  Socialism within those societies bred the weakness and fragmentation that allowed inferior forces to conquer and control vast swaths of land and multitudes of people.

Japan bucked the trend, ditched feudalism (class based socialism), and adopted many of the policies that made the West so powerful.  Sadly, they also adopted the already hatched seeds of the downfall of the West (nascent socialism).  

My, how governments tend to screw everything up.  If Japan had only been content to let their markets do their own thing rather than trying to dictate growth by conquering new lands (for cheap labor) and adopting militarism as a state policy (in search of cheap energy), they would have done so much better than they have.

Wed, 12/29/2010 - 11:24 | 835591 AnAnonymous
AnAnonymous's picture

How true. Feudalism was a sheer expression of socialism. Way too many people deny that.

I heard that Neanderthal people were socialistic in their heart, a set of simple intrinsic rules so their society could operate. This caused their demise to Sapiens whose simple set of rules was capitalistic. Another major historical event to show the common fate suffered at the hands of socialism.


Djeee, where are the days of fine propaganda gone? Where are the talented propagandists? Maybe they are way too aware of resources depletion to spend theirs on weaving proper propaganda.

Propaganda should be funny at least. 

Wed, 12/29/2010 - 07:58 | 835336 malikai
malikai's picture

"They manipulate production to suit themselves and no one else."

Are you saying that OPEC shouldn't be doing what is in the best interests of themselves?

They have every right to restrict production or change the trading currency if they so wish. Your above statement implies that you have some entitlement or right to the oil they produce. You don't. Neither do I. If we want that oil, we either pay for it, or we make it ourselves. Welcome to the market.


Wed, 12/29/2010 - 08:35 | 835350 CitizenPete
CitizenPete's picture

Irregardless if BigDick is making with the sarcasm or not, there is a point to his Neanderthal rhetoric and that is the US globalist pigs will take what they can not steal or pay for.  All in the name of apple pie. 

Just watch how fast Hillary waves her cock at the first middle-east country not willing to take bribes (in the form of weapons or protection from the nuclear Zionists) and bend to the will of the elites chosen white smiling puppets and henchmen. The US will have their oil and the elites will milk the wealth from the plebs by setting the price.  Sure they will blame the guys wearing the picnic table cloths on their heads, but they don't set price.  Other than Iran, Venezuela, and a few others not agreeing to the petrol-dollar scam, the rest gave up the right to set the price a long time ago (with every F-15 and patriot missile they received).  Uncle Sam has one hand in your back pocket, while he continually jerks you off with the other. 

Solar Panels, electric scooters, and the Nissan Leaf, bitches. 

Wed, 12/29/2010 - 09:02 | 835368 malikai
malikai's picture

Yea, you are most likely correct, and I despise that this is the case.

As an aside, I do a much better job jerking myself off than uncle same can ever do. Maybe if they stopped using 20 grit sandpaper gloves it would be nicer. Maybe if I just let them take more they will stimulate me with better sandpaper and I'll go buy a new dakota or H3.

Wed, 12/29/2010 - 09:41 | 835423 Revolution_star...
Revolution_starts_now's picture

"how fast Hillary waves her cock"

+1000 for the visual

Hillary "schlong" Clinton

Wed, 12/29/2010 - 10:09 | 835459 pazmaker
pazmaker's picture

Citzen Pete, blanket statements without factual evidence makes one look uniformed.  One who is uninformed should follow the old chines proverb,  "A wise man thinks twice and says nothing."

Venezuela talks a big talk but my friend they participate very willing in the so called petrol-dollar scam.   60% of venezuela's crude finds it way to the USA. So although Chavez talks tough out the left side of his mouth, he gladly takes those greenbacks from the evil empire! Iraninan Crude 0%

Wed, 12/29/2010 - 16:03 | 836250 CitizenPete
CitizenPete's picture

No doubt he does and my understanding is that the US is his biggest customer. Nobody said he didn't take the Federal Reserves loaned FRNs.   This does not mean Chavez will not accept Euros, RMBs, SDRs, Au, etc... now does it?


CFR / backed by GAO Report (from 2006):

Wed, 12/29/2010 - 09:18 | 835393 AnAnonymous
AnAnonymous's picture

Are you saying that OPEC shouldn't be doing what is in the best interests of themselves?


That is only a statement of fact on what has been the norm for decades. Certain countries have no possibility to developp their interests in a way that could be adverse to us.

Check political research papers for example: the whole buzz is about modelling foreign governments so that they are pro-western. Meaning they should operate on the completion of our interests first.


They have every right to restrict production or change the trading currency if they so wish.

And they will have every right to welcome embargo policies and finally land invasions when they are tendered up enough.

Key rule in an extortion business: the extorted can not walk away just like that.

Wed, 12/29/2010 - 09:28 | 835409 malikai
malikai's picture

"Check political research papers for example: the whole buzz is about modelling foreign governments so that they are pro-western. Meaning they should operate on the completion of our interests first."


I bet the romans talked like this amongst themselves in the late 200s. Certainly the British were in the late 1800s. Perhaps the Chinese will be talking like that in 30 years, since it seems that the lifespan of empires has been decreasing rapidly.

Wed, 12/29/2010 - 09:57 | 835439 AnAnonymous
AnAnonymous's picture

I bet the romans talked like this amongst themselves in the late 200s.


Already many points of convergence with the Roman empire.

The roman empire was built on several Ponzis. One was that veterans after service would be given a piece of land. Highly dependent on the land to be captured. When land to be stolen grew scarce, this Ponzi divided the population in two: people who inherited from the Ponzi and people for whom the Ponzi just appeared for what it was, a Ponzi. The latter were confined in securizing the property of others instead of securing property for themselves.

Of course, with much less zeal.

The points of convergence come with the explanations.

Romans loved two lines of explanations for their troubles:

-cultural, Romans lost their values hence the troubles.

-Racial, the blood was tainted hence the troubles.

Explanations showing the incapacity to address the real source of the issue.

People who pointed out the unsustainability of the roman society foundation usually ended bad.

Rings like today's.

Wed, 12/29/2010 - 11:01 | 835555 LFMayor
LFMayor's picture

The Sicilian part of the Roman empire didn't lose their blood lines until they were invaded by the Moors man... you need to brush up on your history.  I suggest a short primer from the movie "True Romance".

Wed, 12/29/2010 - 11:28 | 835599 AnAnonymous
AnAnonymous's picture

Sicily was more a colony to Spain that it was to the Moors but who cares?


Whatsoever, the cultural and racial explanations were only stories to cover up for the real source of troubles: sustainability of the Ponzi which relied on availability of land.

Wed, 12/29/2010 - 11:01 | 835553 tmosley
tmosley's picture

"Not at all often do men of the same trade meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public."  Adam Smith

Understand that OPEC is not a country, but a cartel, and worse, not a cartel made up of businesses, which will act according to their own rational self interest outside of government interference, but the governments themselves.  

Since we have non rational entities in control, we have a situation where oil is either being used up too fast (price suppression), or where the supply of oil is being choked to raise prices (more likely, as that is the purpose of the vast majority of cartels).

But hey, that's the world we live in.  The best way to deal with it is to adopt free market policies here, and let them do as they wish there.  It only means that we will become much richer, while they founder in the results of their socialism.  Eventually, they will want what we have, and the only way to get it is to imitate us.  The market will lead us to self sufficiency in the meantime.

Wed, 12/29/2010 - 12:52 | 835820 Seer
Seer's picture

"The market will lead us to self sufficiency in the meantime."

One way or the other...  That is, I suspect that it will do so in a way that you're really not thinking/prepared for; but, what the hell, we'll give it a shot!

Wed, 12/29/2010 - 22:08 | 837084 BigDuke6
BigDuke6's picture

Always funny to come back to the thread and see how  yanks just don't do sarcasm.

try to get it... its fun. monty python etc.

Junked even though i talked about V8's!

Maybe if i'd talked about the Indy 500....

There has been a lot of shit talked on this thread and i think tmosley has been the only beacon of sense.

i suspect he is a pom who has just emerged from a marxist government to see how totally they have destroyed the UK.

they doubled the muslim population from 2001, how insane is that!!

Wed, 12/29/2010 - 09:12 | 835377 the not so migh...
the not so mighty maximiza's picture

I agree with you, but you know what the can say back into our face,

"The Federal Reserve are liars who despise the east.

They manipulate petro-dollar production to suit themselves and no one else."


Wed, 12/29/2010 - 10:54 | 835511 ebworthen
ebworthen's picture

Conquer or be conquered.

The Middle East is lucky it was the U.S. and the Brits spilling their soldiers' blood then handing the countries back.  If the Russians or Chinese had been there they would have claimed it; or have we forgotten why Russia invaded Afghanistan?

We're too nice.

We saved France and we get disdain.

We rebuilt Europe and we get thumbed noses.

The Middle East is in the process of being subjugated to the radical branch of the predominant faith; but we pretend we don't really need the oil?




Put your notions of a team of horses and a plow - or Grandpa on a tiny tractor tilling 5 acres -in the dust bin with the Model T and FDR.

The bushel production rate we now have in all major food crops is on the thousands of acres by huge planting and harvesting machinery running on diesel, fertilized and treated with pesticides derived from petroleum.


Post WWII, the petrochemical industry allowed our rapid transition into suburbia, and ultimately the sending of our best and brightest to Wall Street to engineer societally toxic financial instrments (and attitudes) that are tearing down the Republic.



Wed, 12/29/2010 - 11:06 | 835563 LFMayor
LFMayor's picture

Who's going to go hungry first, them or us?  This could be handled well, by the Right Man.   When they've experienced a good hungry for a bit, we'll trade food to them for that damnable oil and it will be as if El Cid had come back, catapulting bread into Valencia.  They'd build statues of that right man for the next 200 years and name all of those fucked up madrassa oil wells of faith and suicide bomber schools after him.

Wed, 12/29/2010 - 11:36 | 835616 AnAnonymous
AnAnonymous's picture

Who's going to go hungry first, them or us?


If left unfolding as it is now, us without a doubt. Most ME countries have outsourced their food production with leasing or buying arable land in other countries.

Without cutting their trade routes, well, they wont starve soon enough.

Once again, the US will play its monopolity on security to remind those guys while they might appear independent for food matter, nothing goes in or out their countries without the US' consent.

Wed, 12/29/2010 - 19:04 | 836796 Citxmech
Citxmech's picture

Trade routes and agreements are only as stable as the promises that made them. 

Once people start going hungry in those exporting lands, I expect these agreements to be broken quickly

Wed, 12/29/2010 - 11:11 | 835573 tmosley
tmosley's picture

Spoken like a true socialist.

Socialism is about cementing the order of the world in its current form.  This is why it never works.  Even when you try to use guns and bombs to get more resources, you just wind up squandering them, instead of using market conditions (higher prices) to spur development of alternative technologies.

Stop trying to control the actions of others with force.  Instead, look at the world's situation, and use your understanding to make money off of it.  The act of your making money pumps value into the world.  Enough people doing this makes everyone rich, no matter what the energy situation.

If you are so worried about running out of oil affecting food supply, open up an aquaculture business.  You can produce large volumes of vegetables, fish, and probably grains for just the cost of running a few pumps.  Such a setup will allow you to produce food much more densely than any oil driven farm, and you can set up shop right where you intend to sell it, so no oil required.  Just a small amount of electricity, which can be supplied on site if need be, either from solar panels or a little furnace burning waste (of manually, even).

Wed, 12/29/2010 - 11:53 | 835669 LFMayor
LFMayor's picture

That aqua culture is going to be pretty tough to pull off in places where potable water is scarce or precious bait fish have to be protected ... like the Arabian Peninsula or California.  The end result is that the majority of the world is going to starve, or produce goods on demand in order to survive at current population levels.  Because, Heinrich, if we all become bien peasant farmers, working our little aquaculture homesteads in the new lands to the east, how (or even why) is all that surplus food going to make it to BFE to feed those starving, uneducated masses that have no commodities to barter with? 

Let's say all the idiot greens have an epiphany tomorrow and we begin construction of nukes,  big ones, little ones, mobile ones now running prime movers on super-railways, generating all those electrons we need for our pollution free electric transports.  That WHY part is still a factor when it comes to shipping that surplus food to those teeming masses.  The why will become "to control" when and a very big if the PTB do it.  It's easier and cheaper to starve them, plus that makes them even easier to control.

The US won't starve... nor will it run out of oil (until it does and then we use nukes like i mentioned earlier).  The PTB enjoy the edifice that they rule from, and they'll stop at nothing to maintain their positions and ensure that all their willing slaves produce at peak efficiency.  I predict that there will be a shortage of commercials where fly covered children weep to mournful chords, since this imagery will then run counter to the acquisition of that petroleum needed to keep this societal balloon we're living on up in the air a bit longer.

The order of the world can never be cemented permanently.  Technolgy advancing prevents it.  Hell, natural disasters prevent it from becoming truly static.  My true socialism as you put it, is simply an observation on who has the most power currently.  Who is going to knock the USA off the top perch?  I say that the PTB will run it ALL into the ground, so long as they're the last to be eaten and the rest of the world, including you and I, be damned.

Wed, 12/29/2010 - 12:48 | 835812 Citxmech
Citxmech's picture

FYI  Apparently IBM was making contingencies for that food bill [those same wonderful folks who brought efficiency to internment]:

Note the referance to Farmer's Market produce being bar-coded - in case there was any doubt.

Love the "loyalty cards" also.

Wed, 12/29/2010 - 13:07 | 835846 Seer
Seer's picture

"The Middle East is lucky it was the U.S. and the Brits spilling their soldiers' blood then handing the countries back.  If the Russians or Chinese had been there they would have claimed it; or have we forgotten why Russia invaded Afghanistan?"

Interesting take on things...  I suspect that a Russian (BTW - it was the U.S.S.R. that "invaded" Afghanistan, not "Russia") might point and ask "how's it working out for you people of Afghanistan, to be bombed into the stone age by a global military invader?"

To add a bit more (conveniently overlooked?) information, the U.S.S.R. invaded Afghanistan in order to push back destabilizing forces along its borders.  Yes, I'm sure there were ambitions of warm water ports, but if not for the US meddling such ambitions might have never been exercised.

And as for China, how many military bases do they have outside their country?

Again, for all those who believe that the US and its western allies were ridding the world of evil Communism, if a system is so bad then how the heck could you possibly believe that it could take over the entire globe?  Paranoia and control, works well to exploit people, and the US does it so well all the while convincing everyone that it's trying to combat the very same forces/traits.  That's how power works...

I agree with your basic comments about US dependency on oil.  But... no oil does NOT mean no food.  Some Prof up in Canada determined that fossil fuels account for 30% of the world's protein; while this is a big percentage, it's NOT 100%!  The real equation is: less oil = less people.

Wed, 12/29/2010 - 11:16 | 835579 h3m1ngw4y
h3m1ngw4y's picture

that comment is dumb in so many ways. better do some research, why gold is on a oil-standard. when the fields are empty watch the fireworks after the revaluation to market of their gold holdings swapped for oil consumption of the west. they couldnt care less about your v8 and your 20 bucks. the oilprice isnt the problem, the goldprice in oil is. but plz dream on of your mad max 3 world *g*

Wed, 12/29/2010 - 07:34 | 835315 luigi
luigi's picture

"Remember housing values? That vital gauge of U.S. economic health that mainstream media pundits have been calling a bottom on every month for the past two years? Well, prices still haven’t bottomed yet, and now they are expected to decline continuously through 2011:

What about durable goods? That market should be hopping if a rebound is in progress, right? Nope. Durable goods are experiencing a substantial decline, similar to that which occurred during the plunge of late 2008 and early 2009:"

And this while the USD is devaluating... I suggest everyone to dedicate some time in cultivating vegetables wherever they can...

Wed, 12/29/2010 - 09:05 | 835370 cossack55
cossack55's picture

Good luck finding seeds now that the Food "Safety" Bill passed.

How do you control the masses.  The 3 Fs.

Food (FSB passed by voice vote, the cowardly scum)

Fuel (read above article)

Fear (terrorism)

There is nothing new under the sun.

Wed, 12/29/2010 - 09:57 | 835445 Grifter
Grifter's picture

I've purchased from the first, found the second on Of Two Minds (see the "Zero Hedge Reads" section to the left.)

Wed, 12/29/2010 - 13:24 | 835894 Seer
Seer's picture

Yeah, like anyone can stop people from saving and trading seed?  Not a chance in hell.

Handy excuse, though, for people to NOT hassle with saving seeds.

Wed, 12/29/2010 - 07:34 | 835318 Rogue Economist
Rogue Economist's picture

Did we miss the fact that after spiking up to $147/bl last time, after demnd destruction the price dropped back down to $35?  What is going to support the price at $150/bl this time?  Consumer have more money now?  Nope.  This is not going to be a steady rocket shot upwards. Volatility. Up spikes, down crashes until the system ceases to function in a meaningful fashion.


Wed, 12/29/2010 - 07:42 | 835326 absinthejo
absinthejo's picture

True. Oil spikes are always followed by demand destruction. The severity of the spike is reflected in the move downward. 150+ a barrel will be followed by 20-30 bucks toward the end of the year.

You want hyperinflation? You need actual oil shortages.

Until further notice, it's another wave of deflation that's coming.

Wed, 12/29/2010 - 08:05 | 835342 malikai
malikai's picture

This is something the "doomer" peak oilers don't understand. They take the supply side of the peak oil observation for face value and ignore the demand side. The fact is, there are a lot of things that can and will be cut back when oil hits $150/bbl again. The arabs would love to see $250/bbl oil, but it won't happen when nobody is driving anywhere and everyone is out of work.

Wed, 12/29/2010 - 08:45 | 835355 blindfaith
blindfaith's picture

let these SOB's in the middle east and all of the east all the way to the Pacific Ocean start paying for the military protection that the US citizens are paying for now.  They will fold like cards in a heart beat.  The trillions of dollars we have spent on these "friends" have only created hatred for us.

Imagine what Saudia Arabia, Dubai and the Emirates would do.  Pakistan's military would crumble without our billions sent to these thieving deceitful liars.  North Korea, fuck them...they have refused to buy a nickel from us all these years we have looked after them and built their industries up just to screw us.

WITHOUT the US NAVY NO tanker is safe on the high seas!  And we pay for that escourt, from the middle east to ports around the world.  Do you ever hear France say thanks?


WHEN will America learn???

China is going to drill off the north of Cuba for OIL...and off Brazil too.  Lets buy more worthless toys from them too.

America is a land of fools governed by morons.  We joke how the American Indians sold Manhatten for some shells and mirrors, we are selling all of America out for even less.

Wed, 12/29/2010 - 09:07 | 835371 cossack55
cossack55's picture

Gee. Ya think?  Try waking up J6P to your above salient points. Easier to wake the dead.

Wed, 12/29/2010 - 09:13 | 835379 Snidley Whipsnae
Snidley Whipsnae's picture

"The trillions of dollars we have spent on these "friends" have only created hatred for us."

I agree...The trillions spent in wars in Korea, Viet Nam, Panama, Granada, Iraq, Afganistan, et al... and they still don't love us.

How can these people, bombed into near oblivion by the US, be so ungrateful? Why are they not throwing rose petals in our path?

Wed, 12/29/2010 - 09:48 | 835430 blindfaith
blindfaith's picture

both of us know full well that is is not as simple as I put it or you put it.  We both can write books. 

What governments agree to may not be what the people want.  I didn't want the money and lives spent...wasted, and these countries didn't always want the us there ( but some did).

America has a LONG bad record of mucking up things that may have started out to be a grand idea.  Esienhower was the last General who had it together, we sure ignored his warnings.

But still, my point is that our tax dollars make the US military the commerce police of the world...every bodies world.  That IS not what their job is.  Escorting tankers and caravans, guarding the front door of palaces, protecting corrupt governments from their oun people...this is not what I want any US serviceman doing. I want them all home, period.  I see no country on earth worth the blood of one of our men or women.

Frankly I don't know what the military's job is anymore, do our leaders, do you?

Wed, 12/29/2010 - 11:36 | 835619 Snidley Whipsnae
Snidley Whipsnae's picture

Yes, it is not as simple as either of us described.

Yes, Eisenhower had it together but he began our entanglement in Viet Nam because the French asked for help to regain their colony there at the conclusion of WW2...and he got us entangled in Korea because of the 'menace' of communisim overtaking capitalism (his opinion or excuse, not mine). Unfortunately Eisenhower waited until his farewell address from the White House to warn us about the evils of the military/industrial fact, his original speech contained a warning about 'the military/industrial/congressional complex, but it was felt that including congress was too inflamatory so it was removed'.

Yes, we have become the 'police of the world'...but it is at the behest of big business, bankers, globalizers and one worlders. No one asked me if I thought the US Military should be the world's police. How about you?

See what ex marine general Smedly Butler had to say about the US Military and their overseas interventions: "Smedley Butler on Interventionism"

BTW, this is the same Smedley Butler that was approached by a group of oligarchs that wished to have FDR assinated and he so testified before congress.

Our military's job is what the Constitution states that it is...not what it is currently doing.

Happy New Year blindfaith and to all here on Zero Hedge!

Wed, 12/29/2010 - 09:15 | 835382 sushi
sushi's picture


we are selling all of America out for even less.

End Quote

This phrase would better represent reality if it were in the past tense as in "We sold out America for even less."

Wed, 12/29/2010 - 09:49 | 835434 blindfaith
blindfaith's picture

I still have hope.  We are not dead.

Wed, 12/29/2010 - 10:42 | 835515 hedgeless_horseman
hedgeless_horseman's picture

On a long enough timeline

the survival rate for

everyone drops to zero.

Wed, 12/29/2010 - 09:16 | 835387 malikai
malikai's picture

So be it. All the chickens eventually come home to roost. Think back to the late 19th century, after the civil war. How many British scientists and inventors came to the states and how many others stole technology from Britain to bring it to the states. This is the natural order. Mayhaps in the future the USA will be to Chunguo as the Britain has become to the USA. You would be surprised to know just how many american scientists and engineers are making their way to China and India.

"China is going to drill off the north of Cuba for OIL...and off Brazil too.  Lets buy more worthless toys from them too."

Lol! You know where that oil will be going? Probably not China. More likely than not that oil will end up in Galveston if the Chinese can even find and produce it. But it is a nice finger in the face of Uncle Sam. Them darn Chinese sure do know how to make a funny.


Wed, 12/29/2010 - 09:26 | 835407 AnAnonymous
AnAnonymous's picture

WITHOUT the US NAVY NO tanker is safe on the high seas!  And we pay for that escourt, from the middle east to ports around the world. 


Welcome to delusional land. The US has imposed a monopoly on security. Alas, the technological gap between nations like Somalia and the so called free riders like Japan or Europe nations is too big to give credence to the "no tanker is safe" drivel.

The US gains much more by controlling the trade routes than it invests on. It forces people to play ball with the US.

You are no kind to the US? You no longer have an access to the commodity world market.

Victimilogy in the US is so high that it leads to comments  like that one.

Wed, 12/29/2010 - 10:07 | 835465 pazmaker
pazmaker's picture

I think you mean South Korea.

Wed, 12/29/2010 - 12:37 | 835789 RafterManFMJ
RafterManFMJ's picture

Agree. You want to flag your tanker in Panama? Go ahead, and let Panama defend her at sea.  But understand, your cash and blood goes to fuel the grand ambitions of the elite; they hand it out in foreign aid, low-interest loans, weapons deals, sea rescue, tsunami relief, wars that DO NOT benefit your security...etc etc forever and ever, Amen.


Your job is to to bleed your blood and cash, watch TV and buy Chinese manufactures. So get to it.

Wed, 12/29/2010 - 09:30 | 835411 AnAnonymous
AnAnonymous's picture

The fact is, there are a lot of things that can and will be cut back when oil hits $150/bbl again.

The arabs would love to see $250/bbl oil, but it won't happen when nobody is driving anywhere and everyone is out of work.


Glad to read that doing without a job is just a matter of appropriate mind set.

When I thought that working was somehow a necessity to earn a living and support yourself...

Wed, 12/29/2010 - 09:47 | 835429 malikai
malikai's picture

I'm not saying it is a good thing. I'm just pointing out that demand is elastic. It will be a horrible thing for the people on the sharp end of that stick, which is us. Failure to accept reality means being stabbed in the back, instead of in the stomach. Which do you want?

Wed, 12/29/2010 - 10:12 | 835474 AnAnonymous
AnAnonymous's picture

Demand is elastic and?

Oil will be priced at what people are able to put on the table.

A stabilization on a high price (compared to normal standard) takes time as screening between people who can afford to pay that price and  people who cant can not be determined in one day. Time is needed to reorganized all that.

Wed, 12/29/2010 - 13:52 | 835974 CrashisOptimistic
CrashisOptimistic's picture

I've done some work on the issue of demand elasticity.

It begins and largely ends in understanding that demand and consumption do not need to be the same thing, and indeed are not.

Without the dry math, anecdotally it comes down to this: There are no more Sunday drives with the kids.  That disappeared from the cultural norm of America 40 yrs ago.  Another item is carpooling, which does happen, but has been around now so long that the full extent to which it *can* happen has been embraced.  There are very few now who would "car pool if they had to" but don't do so now.  

Then there is the issue of car racing.  It is there, and it simply doesn't burn much oil.  If you erased car racing, the dollars flowing from that "industry" into oil companies disappears and that is money that doesn't get spent on exploration.  In other words, declinding consumption can reduce production *capacity* (of course it reduces production).

Lots of subtle stuff.  Bottom line being, for this comment, don't hang your hat on any sort of significant elasticity in oil consumption . . . errr demand.  There really, truly, isn't much waste of it in the US -- with waste defined as consumption that does not map directly to GDP.

Wed, 12/29/2010 - 09:31 | 835412 FrankIvy
FrankIvy's picture

We understand it quite well.  It's not chocolate or movie tickets or 50 dollar shorts.  It's energy.  There is no "stop driving" for most people.  What we understand is that energy is at the very end of everybody's "things I will give up" list.  Given that, demand pressure is not going to fall quickly as gasoline and diesel go to 5, then 10 bucks a gallon.  In any event, my predicted decline rate of world oil production is 7-10%.  At that rate, even a steep demand decline rate won't do anything to lower prices.

The great falacy of those uninitiated into the end-all of Peak Oil is that they treat oil like an economics 101 professor would treat corn, arguing that people will just go to an "alternative" or do without if oil gets too expensive.  Good luck with that. 

Wed, 12/29/2010 - 09:48 | 835432 AnAnonymous
AnAnonymous's picture

Even an economics 101 professor understand that a decline in the concretized demand does not imply that the price will fall.


This is another fallacy. The decreased supply in oil will indeed limit de facto the concretized demand. It does not mean it will diminish the price.

People are so self centered they index the price of oil on what they are able to pay for.

It happens every day: people who cannot fork enough do no have the goods.


Wed, 12/29/2010 - 10:12 | 835467 blindfaith
blindfaith's picture

wow you are some academic.  Some of your sentences have either no verb or noun so it makes your thoughts ...lost.

Their are those who look at the big picture as civilization.  One human family, what is good for all, is good for you too. This country is supposed to be civilized, look around it?  Civilization is being replaced by the rules are different now, and every man for himself, who cares, so what, and get out of my way... all ingredients for anarchy and the fall of nations. 


Wed, 12/29/2010 - 10:14 | 835478 AnAnonymous
AnAnonymous's picture

wow you are some academic.  Some of your sentences have either no verb or noun so it makes your thoughts ...lost.


You made me laugh with this one. Good luck in trying to illustrate this point.

Wed, 12/29/2010 - 15:42 | 836259 Clycntct
Clycntct's picture

So begging the question. Which came first. The fall or the failure.

Wed, 12/29/2010 - 09:59 | 835449 malikai
malikai's picture

I disagree. If we see a decline rate of 7-10%, there will be rationing again, coupled with extreme prices, for only a short time (1-2 years). People will not be able to afford it and governments would go broke trying to subsidize it. Nothing would destroy demand like that. After the first surge in prices, people would wake up to the reality. What happens after the first shock or two would determine the likely outcome of adjustment and crash course investment or world war three. Either of those two outcomes also includes further demand destruction. Perhaps the prices would remain historically high, but it would not last forever. Eventually there will either not be enough people on earth to want the oil, or we will have moved on to another liquid energy feedstock and left oil for other specialized purposes like plastics and other high margin/low volume products.

Wed, 12/29/2010 - 10:21 | 835488 AnAnonymous
AnAnonymous's picture

What reality? That quite a lot of people live on a x<$10 per day?

Money to support a high price on oil is already circulated.

All is take for a 'high' price on oil is a solvent demand. Which exists.

People who can not pay for the high price of oil will not be able to afford oil.  

Wed, 12/29/2010 - 10:25 | 835501 FrankIvy
FrankIvy's picture

1.  There are no alternatives to oil.

2.  Prove it and live without oil for a week (and all of its products).


You don't understand how critical oil is to your way of life.

Wed, 12/29/2010 - 11:50 | 835661 malikai
malikai's picture

I think I have a pretty good idea how critical oil is. This means I am also aware of the fact that 60% goes directly towards transportation. I believe that upon a real set of oil shocks, demand will crash, quickly. It took a 1% or so excess of demand to more than double the price of crude in a year. Once the surge broke, oversupply and price collapse occurred, causing the price of oil to fall more than 70% in less than 6 months. Perhaps next time OPEC will cut production faster and in larger amounts, but next time demand may also fall much more sharply.

Saying there are no alternatives to oil implies a lack of faith in humankind. I disagree. I believe we will figure something out. Whether what we figure out is to kill ourselves off or we learn sustainability, I take comfort in the fact that the earth itself will be fine, no matter what we decide to do with ourselves.

Wed, 12/29/2010 - 15:49 | 836279 cougar_w
cougar_w's picture

the earth itself will be fine, no matter what we decide to do with ourselves.

I am a research-grade Ecosystem Biologist, and I disagree with your thesis. There are a number of interesting and extremely lethal ways we could take the rest of the world with us when we go. The first that comes to mind is that desperate people do not simply roll over and accept death, but rather first turn to the natural systems around them to extract every last ounce of nutrition and raw materials and only then do they roll over and die.

Although if you meant the lithosphere Earth enduring after we are gone, then yes the rocks will be fine.

Thu, 12/30/2010 - 07:14 | 837366 malikai
malikai's picture

How many mass extinctions have occurred on this little rock we live on? How many times has >90% of life on this planet been wiped out, only to pick right back up where it left off? I may not be some research-grade ecosystem biologist, but I am capable of drawing conclusions based on historical precedence. I can say with 100% certainty that humans are not capable of destroying life on this planet. We can and may end up destroying ourselves, and perhaps even 99% of other species. But the remaining life will evolve, and take over where we left off. There is only one or maybe two things capable of destroying life on this planet. That is, the sun's eventual shift to a red giant, or a massive asteroid/planetary collision, causing a complete destruction of earth. Neither of those are on the cards any time soon.

Wed, 12/29/2010 - 10:48 | 835529 VisualCSharp
VisualCSharp's picture

What "other liquid energy feedstock?"

And "specialized purposes?" Try EVERY purpose.

Wed, 12/29/2010 - 15:52 | 836291 cougar_w
cougar_w's picture

What "other liquid energy feedstock?"

Unicorn piss. Burns like a mo'fo.

Wed, 12/29/2010 - 12:50 | 835814 trav7777
trav7777's picture don't get it, do you?

If supply falls, it doesn't matter what demand is, nor what price is.  Supply is what's out there.

The price has to reflect a balancing of supply and demand.  Demand destruction in the aggregate means shrinking economies.

At least until we discover your magical energy elixir that will return us to Happy Motoring

Wed, 12/29/2010 - 10:36 | 835507 rwe2late
rwe2late's picture

a) declining supply will compensate for a decline in demand due to rising price.

b) the global military is the world's biggest consumer of petroleum products. Not much decline in consumption to be expected there.

c) The poorer nations/people will mostly be the ones to do without. US consumers will be able to budget some extra dollars for gas. But $2 a day peasants will have to do without gas or food as the foodstuffs/commodities they can no longer afford in the international (fiat)petrodollar market are effectively converted to ethanol for US-driven SUVs and armored humvees.


And this will continue for how long?? ...

Wed, 12/29/2010 - 12:53 | 835825 trav7777
trav7777's picture

A) is what I tried to get idiots on TF to understand.

So demand craters...SO IS SUPPLY.  In a climate of declining supply, consumption MUST drop too!

And that means smaller economies, permanently.

Because a drop in price due to a demand crater is not going to cause supply to grow again.  Maybe there will be a rebound, both in consumption and price, but it only puts you back up to the overhead supply curve which is still declining.

Wed, 12/29/2010 - 11:29 | 835605 tmosley
tmosley's picture

"There is no "stop driving" for most people."

I beg to differ.  If oil hit $1000/barrel (ie an arbitrarily high number), then suddenly it is economical to pay a much higher price for rent within walking distance of your work.  Suddenly, it is economical to have small farms supplying nearby cities.

That's the thing about prices in free markets, they dictate behavior to conserve scarce resources.  Small steps in that direction are taken with small steps upward in price.  In 2008, that meant simply driving less, and consuming a little less.  in 2014, that might mean bulldozing suburban developments for farmland, and construction of urban apartments.  It might mean the reemergence of subways and trains as the primary means of personal transportation.  Much easier to supply a city with a train than vast areas of suburban sprawl.

I find it hilarious that you peak oilers seize on ANY major depression, even when clearly caused by other factors, and you blame it all on peak oil.  Apparently it's because you love being fucked in the ass by government, and reason that if you weren't being fucked in the ass by government, you would be fucked in the ass anyways.  

Well, here's an idea for you.  If you think oil production is going to fall at 7-10% (per what?  Per year?  Asinine), then why don't you do your part for the world economy, and just off yourself?  You can go along with all the Heaven's Gaters who believe in global warming.  That ought to buy us a few years at least.  Zero sum morons.

Wed, 12/29/2010 - 11:44 | 835649 AnAnonymous
AnAnonymous's picture

 If oil hit $1000/barrel (ie an arbitrarily high number), then suddenly it is economical to pay a much higher price for rent within walking distance of your work.  Suddenly, it is economical to have small farms supplying nearby cities.


Economical? What is that word?

Living near your job site is already economical. Done by all those who can afford. For them, it is already economical to act this way.

Troubles with commuting will only make renting/buying near a job site more expensive. Therefore a higher load on wages. Probably that it will also impact the job market in the way that people who can remove the load of renting (because they inherit the house) will be better prospects for any hirer.

I find it hilarious that you peak oilers seize on ANY major depression, even when clearly caused by other factors, and you blame it all on peak oil.

Propaganda has to retain a certain sense of measure. People blaming the major depressions/recessions of the 19th century on oil?

Wed, 12/29/2010 - 12:21 | 835749 Pants McPants
Pants McPants's picture

Anyone who doubting tmosely's above comment need only look at parking prices at NFL stadiums.  Somehow, in spite of $1000 parking passes, the spots remain full.  Miracle of miracles, people start carpooling in order to spread the costs around.

Point is, when allowed to fluctuate freely, the pricing system is the best mechanism to distribute property and resources to those who need them most.

Wed, 12/29/2010 - 15:10 | 836151 That Peak Oil Guy
That Peak Oil Guy's picture

Comparing getting to an NFL game to the world economy is a bit silly (though highly American) of you.

But let us take your analogy and look at it in more detail.  Is this carpooling process as efficient as getting into your car and going?  Of course not!  You have to arrange the carpooling and make calls to organize it and wait for the person who shows up late.  You would not do it if you didn't have to because it causes you all sorts of potential problems and requires more investment of your time (labor).

This is exactly the same sort of behavior we would expect on an economy experiencing rising energy input costs; things become less efficient.  And when things become less efficient it leads to a decline in production.  More and more of your outputs are going into extracting your inputs, so overall production is less.  Throughput suffers.

You may come up with some ideas to make the carpooling organization easier, and these will help, but only to an extent and only for time. The fact is that you would not carpool if you didn't have to, but you are willing to lower your expectations so you can at least go to the game.  As the price of the tickets goes up you take on more and more carpoolers until the vehicle is crammed full and very uncomfortable.  But at least you can still get to the game!

Obviously this can not continue. At some point you decide it is much easier and less costly to just stay at home and watch the game on your big HDTV.

The point is not that peak oil is here and we are all doomed.  The point is that peak oil is here and we need to set our expectations for declining productivity.  Instead what we have done is try to preserve business as usual through issuance of debt (both economic and environmental).  This has kept us extending and pretending for quite a while, but now the debts are about to be called in.

Thus a slow-moving energy crisis begets a monetary crisis.

Videoconferencing, bitches!


Wed, 12/29/2010 - 12:56 | 835832 trav7777
trav7777's picture

wow you are stupid.

Why don't we just off YOU?

Wed, 12/29/2010 - 10:37 | 835510 johan404
johan404's picture

Arabs would hate $250/bbl. The Saudi populous is on the brink of revolting, $250/bbl would push them over the edge for sure. And you know those radical islamists will actually follow through unlike Americans and other Westerners.

Wed, 12/29/2010 - 11:20 | 835584 Citxmech
Citxmech's picture

Er...  Does "Bumpy Plateau" ring a bell?  Yes, the "doomers" anticipated that.

Wed, 12/29/2010 - 12:43 | 835801 trav7777
trav7777's picture you understand that "cutting back" is a synonym for economic recession?

Why don't you idiots just STFU?  Nobody is driving and everyone is out of, isn't that "doom"?

Wed, 12/29/2010 - 13:49 | 835957 Seer
Seer's picture

Well, I suppose that my views would lump me in with your catch-all "peak oilers" label.  I've never operated in the discussion of oil with a half-baked equation.  You might claim to be operating with a full equation as well, but it looks, to me, as though you're missing what the equation will produce.  The proper definition of "peak oil" is really "peak production;" doesn't matter the reason for it, what matters is that there will be a discontinuance of growth.

It's troubling to see the subliminal racism in your post, that "arabs would love to see $250/bbl oil."  As though it's only "arabs" that would somehow benefit?  I think that you need to understand petro-dollar recycling a bit more; also, I believe that Russia, which is NOT "arab," and the world's top producer of oil, wouldn't mind higher prices as well.  And, wouldn't US "green technology" companies want higher oil prices?

Better would be to replace "arabs" with "OPEC."  But... it would also be of value to understand the reasons for the formation of OPEC: look up Texas Railroad Comission for a clue.

Price per barrel, however, is kind of meaningless, as is clearly pointed out by your comment about the affects of increasing unemployment on oil sales.

Wed, 12/29/2010 - 08:47 | 835356 RagnarDanneskjold
RagnarDanneskjold's picture

The Fed pumped money into a stagnant economy, it runs into commodities and the price increases eventually trigger a deflationary wave.

The Fed will then pump money into a stagnant economy, it runs into commodities and the price increases eventually trigger a deflationary wave.

Each time the Fed is printing more and more money, but the underlying economic destruction will be greater and greater. The seeds of hyperinflation are being sown...but it will take longer than most expect.

Wed, 12/29/2010 - 09:09 | 835375 cossack55
cossack55's picture

I'm afraid you may be right. 

BTW, when are you going to start sinking the ships full of FRN's headed for the Euroscum.  Don't forget to rescue the gold.

Wed, 12/29/2010 - 10:47 | 835531 KickIce
KickIce's picture

Except there is going to be food shortages.  I understand this is not inflation but it will still drain your bank account.

Wed, 12/29/2010 - 09:14 | 835381 Calmyourself
Calmyourself's picture

Remember Gonzalo Lira's (sp) contention that there would be a tipping point t into hyperinflation and that it would start with a commodity run..  I am starting to think we have arrived.  No shortage of oil is necessary for a hyperinflation of the commodity just a major lack of confidence in the agreed upon currency of trade.  How would a shortage of oil cause or exacerbate hyperinflation this is no longer a demand issue it is a dollar issue.  The Arabs are a lot of things but not stupid, gold will be the only currency purchasing oil if demand pull coupled with seriously quick dollar devaluation takes hold.

Wed, 12/29/2010 - 10:12 | 835471 SheepDog-One
SheepDog-One's picture

Ok, then theyll just declare 'oil shortage'! 

WHO run Bartertown? MasterBlaster run Bartertown! Embargo ON!

Wed, 12/29/2010 - 10:43 | 835517 johan404
johan404's picture

Yes, the peak in oil production happened in 2008 and the decline is due to start soon, I'd say within months, and that equals shortages as demand is rising in China, India and other developing nations. $20-30? Unlikely. After the price goes up to $150+ and then drops, I think the floor is at maybe $75, the next spike will come much sooner as production declines further, and the one after that will come sooner than the one before, and so on.

Wed, 12/29/2010 - 07:47 | 835329 luigi
luigi's picture

It also depends if the spike lasts long enough to start severe social unrest in a population affected by steady wealth decline for some years now... Maybe I'm too "apocaliptic", but I wouldn't dismiss this option that easy this time round.

Wed, 12/29/2010 - 07:47 | 835330 snowball777
snowball777's picture

Two different price speculator-driven (parked-tanker, poppin' fresh bubble souffle edition) and one by the collapse in dollar purchashing power (PPT inkjet bubble edition).

This is the dark side of reserve currency status and indicative of the monetary and fiscal straits in which the US find itself today which will slide down monotonically (unlike the stock market which you describe).


Wed, 12/29/2010 - 08:53 | 835360 Snidley Whipsnae
Snidley Whipsnae's picture

Bingo Snowball!

Posters prior to you seem to forget that it's the fiat dollar that is sinking like a rock, and not that oil has suddenly become more valuable or scarce. The dollar is being printed to death and few seem to realize the implications...

If little Ben continues on this path he will eliminate the dollar as a transaction medium...long ago it stopped being a store of value.

The run up in commodity prices are due to a sinking dollar and that is the thrust of this thread. Hello, anyone care to discuss the topic?

Wed, 12/29/2010 - 09:13 | 835378 cossack55
cossack55's picture

I think you are quite correct.  A little more acceleration would be nice though.  I keep having to increase the magnifications of the scopes on my long guns as my poor old eyes age.  Want to buy some new/unused 3x9s.

Wed, 12/29/2010 - 09:19 | 835392 Calmyourself
Calmyourself's picture

Model, price?

Wed, 12/29/2010 - 11:14 | 835577 LFMayor
LFMayor's picture

Have you checked into getting laser keratomy or PRK done?  I just had it done a little over a year ago... now 20/10 uncorrected, and I freakin love it.  Get it done before the power goes out!

Wed, 12/29/2010 - 09:18 | 835389 Calmyourself
Calmyourself's picture

Gonzalo Lira (sp), commodities as a tipping point to hyperinflation.  This lesson will be too clear for the masses to miss.   The media is preparing the ground prepping the sheep for the new slaughter but food prices have prepped the other way.  People are recognizing inflation this time.  Dollars will start chasing something just like Lira suggested and then the spiral...

Wed, 12/29/2010 - 09:25 | 835403 blindfaith
blindfaith's picture

maybe, but I spoke to a "high net worth" investment advisor on Christmas who said the money is going into commodities because the money IS goinginto commodities.  Look at all the talk here on ZH.  At some point, commodities will not be the place to be...just hope you get the word early.

Wed, 12/29/2010 - 09:35 | 835417 Calmyourself
Calmyourself's picture

I do not pretend to be on the level of most of you on investing, nomenclature or practice.  I compete in other areas.  That being said could you unpack this statement as it seems to be code for something not sure what?   "said the money is going into commodities because the money IS goinginto commodities."

Wed, 12/29/2010 - 10:13 | 835476 SheepDog-One
SheepDog-One's picture

YES Snidley! Where is the massive dollar printing showing its effects? Takes was more FIATSCOS to buy a barrel of oil which is its only real backing! 

DUH people! Its really not that elaborate...the dollars only value is its used for oil trade, and those selling oil demand way more of the pieces of paper.

Wed, 12/29/2010 - 09:16 | 835385 Snidley Whipsnae
Snidley Whipsnae's picture

"What is going to support the price at $150/bl this time?"

Benny boy printing trillions of the point where no amount of dollars will purchase a barrel of crude.

Wed, 12/29/2010 - 10:15 | 835477 SheepDog-One
SheepDog-One's picture

Exactly right Snidley. Simple! 

Wed, 12/29/2010 - 10:06 | 835460 AnAnonymous
AnAnonymous's picture

Did we miss the fact that after spiking up to $147/bl last time, after demnd destruction the price dropped back down to $35?  What is going to support the price at $150/bl this time?  Consumer have more money now?  Nope.

Last time, US citizens bet up one against another until one had to fold up because of troubles to make ends meet. With all a sequence of problems coming up about the solvency of certain US citizens.

The situation can grow differently as people can still deny the issue of solvency but without affecting the reality of it. Very little is solved concerning the solvency issue and the price of oil has been going up again and again.




Wed, 12/29/2010 - 10:06 | 835463 ciscokid
ciscokid's picture

Yeaps! I believe Dick and George were in charge at that

time,man! the sure made a pile. 

Wed, 12/29/2010 - 10:25 | 835500 FrankIvy
FrankIvy's picture

2008 was a fit and start.  The trend since 2000, in real terms, is steadily increasing price of oil and gasoline/diesel.  Don't be distracted by an anomaly.

Wed, 12/29/2010 - 07:36 | 835320 SheHunter
SheHunter's picture

Excellent article.  Which I read while listening to the diesel truck and tractor outside idling in their warm up mode.  I like to think how self sufficient we are up here in the mountain backcountry.  Maybe not so much.  Interesting times ahead.   

Wed, 12/29/2010 - 07:45 | 835328 luigi
luigi's picture

You could start considering in harnessing your avatar to pull the plough... And no, I'm not joking :)

Wed, 12/29/2010 - 14:00 | 835987 Seer
Seer's picture

Any role that horses will play in the future will be for hauling and initial sod breaking, otherwise it's NO PLOW that will be the norm, which is, clearly, not an employer of horses...  But, anyone wanting a horse should be able to pick one up pretty cheap, as folks who have had them hanging around as lawn ornaments are now finding them too expense to maintain in this down-trending economic world- some horses are being given away! (check out Craigslist!)

If one keeps a horse, just be sure to properly plan for its feeding: takes a lot of land.  I personally think that horse meat is going to make a comeback...

Thu, 12/30/2010 - 05:57 | 837344 luigi
luigi's picture

Actual lawn ornaments or sunday-event-crickets are for the major part not apt for agricoltural work, but better than nothing indeed.

Now that I am involved with horses I couldn't anymore, but as youg student here in Italy, I ate horse meat quite a lot since it was the most inexpensive meat to be purchased: I have to admit, to my regret, that it tastes quite good!

Wed, 12/29/2010 - 07:51 | 835333 snowball777
snowball777's picture

Shake off that harness: bio-diesel.

Wed, 12/29/2010 - 09:02 | 835369 blindfaith
blindfaith's picture

your dreaming, those 'cheap' days are ending and you'll be right back to square one

Wed, 12/29/2010 - 14:03 | 835998 Seer
Seer's picture

Actually, one can make one's own.  Of course, this requires a bunch of land as well (see my above comment about horses- seems to be a "land" theme...).  I don't know, however, whether one can produce effective oils for say crankcases; and then there's lubing issues (grease).  As an owner of a tractor I worry about these things... a reason why I'm aiming to NOT be so dependent on machinery (primary need is for intitial land work).

Wed, 12/29/2010 - 08:13 | 835331 revenue_anticip...
revenue_anticipation_believer's picture

RE Oil price inflation coming $100/barrel sure thing, and then more....the ZH is from:

And the general concept being considered is IF and WHY the price WILL go up... easily to the Summer 2008 peak of $150/barrel....

the very noticeable FIRST thing was the 'elasticity' of the price of gasoline (from oil $150/bbl) which was $4.80 was LESS THAN ZERO, in fact Summer of 2008 was the highest USA consumption EVER,

...and that amount of about 21 million bbl/day dropped in Summer 2009 to about 19 million bbl/day and priced at about $2.00 gasoline gallon

...BECAUSE OF TWO reasons: supply/demand and busting-up of the conspiracy to set prices, FOSTERED BY A KIND OF USA BASED COMMODITY SCHEME, in which Morgan Stanley (as Principal) and Goldman...there was a single congressional hearing, about which no follow up despite a 'whistleblower' all went conspiracy..

1) TOOK VIRTUAL CONTROL OF CONVINCING THE WORLD (INCLUDING THE ARABS, TAKING THEIR CUE FROM Nyse) THAT WTI oil price was all that REALLY mattered...not Brent/not OPEC's posted mixture of oil as benchmark..

2) TOOK ACTUAL 'leased' possession of about 50% of the oil actually physically stored at WTI, location in Oaklahoma Cushing Official Commodity exchange delivery point..Morgan Stanley and Goldman Sacks leased oil tanks at the site, and over a couple of years, ponzi'ed up the World Oil Price - actually POSTED PRICES..the Arabs were all too happy to comply..

here is the historical price listing of WTI from 1 Jan 2008 (bottom at about $38 / barrel)

This is more information about the NOW OBSOLETE SCHEME, SITE LOCATION....WTI is NOT the real/pretend World benchmark
Cushing Oaklahoma storage site

ARABS had generally 'set' the oil price for OPEC, more or less...with the PRIMARY GUIDELINE QUITE SIMPLE...keep the oil as high as possible, BUT BELOW THE PRICE OF ALTERNATIVE ENERGY PROJECTS BEING TAKEN SERIOUSLY....

now 2010, WITH THE USA dollar 'anticipated' (but not a sure thing...rememember, ALL THE OTHER currencies are WORSE..)
with the anticipated dollar depreciation...and a 'so called' recovery in place World-wide..and the previous 2008 experiment in vivo...$150 should be no problem, in the USA

...of course INDIA and CHINA and many other up and coming Nations...a sustained $150 / barrel could be an economic "killer application" = eventuation in Conventional Warfare, as Japan's final DECISION Summer 1941 was a necessary war for oil resources..

Wed, 12/29/2010 - 09:11 | 835376 blindfaith
blindfaith's picture

Damn it!  It is like oxygen...below 90 you have a problem, above have a problem.

OIL above $80 is a killer...period. No if's and's nor butt' is a killer.

$8.oo oil killed Russia not Reagan.  $90.00 will kill America, Europe and the rest of the world by strangulation.

Speculators in vital commodities are little more than murders...they kill someone somewhere by their actions.  It is not all Business folks, the last dime has human blood on it.

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