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Jim Rogers: "Saudi Arabia Is Lying About Being Able To Increase Its Oil Production"

Tyler Durden's picture


Jim Rogers joins Zero Hedge in being highly skeptical about just how credible Saudi's call for a 1MM + boost in its oil supply is: "Saudi Arabia has been lying about the reserves for decades. Saudi Arabia the last two times said they are going to increase production and they couldn't increase production. Don't fall for that. The reason oil is going up is the world is running out of known reserves of oil." Of course, then there is the question of does one trust the Quantum fund creator who retired at 37, or does one go with the sellside lemming brigade of monkeys with typewriters who will groupthink anything and everything to death, just to get paid another completely unwarranted bonus. As to those who are concerned that the commodity "bubble" is about to pop, Rogers says: "It's still years away." And some reinforcement for the gold and silver bulls: "Gold will certainly go over $2,000 by the end of the decade, and silver will pass $50." And as a hedge to his great commodity bull market call, Rogers continues to be short Nasdaq stocks. His thesis: "If the economy gets better I am going to make money in commodities, if it doesn't get better, I am going to make money in commodities cause they are going to print huge amounts of money." Call it the adjusted Tepper call. Rogers is also holding a contrarian all on the dollar: "I own some dollars now because there was a huge drop in the dollar. I do sometimes like to buy things when they collapse, and sometimes I don't. Sometimes I lose money." We assume this is merely a short-term revulsion trade as all the near-record USD shorts get flushed out as we highlighted in the latest Committment of Traders update.

Full interview:





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Mon, 02/28/2011 - 16:43 | 1004815 Cognitive Dissonance
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Jim Rogers to Saudi Arabia. "Liar liar, pants on fire."

But really Jim, since everyone else is lying through their teeth, why pick on the newly returned King Abdullah. Sheesh, give the poor guy time to service his wives before you take him down a few pegs.

Mon, 02/28/2011 - 17:58 | 1005067 Careless Whisper
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since everyone else is lying through their teeth

yeah, but the truth is forcing its way out. they can't stop it.

on his live interview on the view today, alex jones hijacks the last two minutes, while whoopi and barbara try to shut him down.

we've got the banks bankrupting the the u.s.

charlie sheen didn't steal $23.7 trillion, like the federal reserve.


Mon, 02/28/2011 - 19:18 | 1005320 asdasmos
asdasmos's picture

Marc talks mostly energy today.


Marc Faber on CNBC 02/28/11

Mon, 02/28/2011 - 19:25 | 1005351 asdasmos
asdasmos's picture

Peter Schiff talks Fed + Inflation - CNBC 02/28/11

Mon, 02/28/2011 - 20:58 | 1005547 AnonymousAnarchist
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Louis C.K. to Donald Rumsfeld: Are you and Cheney lizards? Hilarious starting at about 2:30 mark.

Mon, 02/28/2011 - 21:19 | 1005598 asdasmos
asdasmos's picture

Michael will finally get an answer.

Mon, 02/28/2011 - 23:16 | 1005867 william the bastard
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Michael Landon was a friend of mine and you're not.

Mon, 02/28/2011 - 23:32 | 1005913 snowball777
snowball777's picture

Take your ass back to the prairie.

Tue, 03/01/2011 - 04:44 | 1006346 asdasmos
asdasmos's picture

Jim Rogers on CNBC 02/27/11 (Part 1)

Jim Rogers on CNBC 02/27/11 (Part 2)

Mon, 02/28/2011 - 21:29 | 1005624 I Got Worms
I Got Worms's picture

Love me some Louis CK - maybe he can be our genreation's George Carlin. Eat a bag of dicks Bernake!

Mon, 02/28/2011 - 22:20 | 1005734 ColonelCooper
ColonelCooper's picture

Careful.  I used that bag o' dicks line and was junked to shit by the easily offended.  You see, the PC crowd has a hard time with shit like context and origin.

The simple fact that you would even watch Louis CK after he used a line like that..... Homophobe.

Mon, 02/28/2011 - 22:33 | 1005761 william the bastard
william the bastard's picture

Don't you have a gay field hand needs whipping?

Tue, 03/01/2011 - 01:08 | 1006138 Strike Back
Strike Back's picture

Why does it not surprise me that CK would talk about lizards.  Just like the Roots talking about the all seeing eye.  Just like Mos Def talking about central banks and the CIA.

Tue, 03/01/2011 - 08:11 | 1006440 NrYC
NrYC's picture


Mon, 02/28/2011 - 19:24 | 1005349 lynnybee
lynnybee's picture

yes, i saw that & sent a video clip of ALEX saying the words "TSA with their hands down your pants" & " We're becoming a police state", & " George Bush kills a million Iraqi's" . ...... sent it to all my skeptical friends & family .    Oh, & how about the statement on NATIONAL T.V. in front of 30,000,000 viewers :  "The FEDERAL RESERVE steals $23trillion " !    ALEX steamrolled over BARBARA WALTERS !

Mon, 02/28/2011 - 19:51 | 1005417 Bay of Pigs
Bay of Pigs's picture

All those women don't have a fucking clue about what Jones is talking about. They were completely unprepared to discuss anything of substance because they don't know anything. He will never be asked back on that show, you can bet on that.

Mon, 02/28/2011 - 20:32 | 1005491 walküre
walküre's picture

why was he on THEIR show?

Mon, 02/28/2011 - 21:02 | 1005556 zaknick
zaknick's picture

Good question.

Mon, 02/28/2011 - 21:04 | 1005565 Moe Howard
Moe Howard's picture

Who watches the view?????

Mon, 02/28/2011 - 22:34 | 1005765 william the bastard
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the 3 stooges: bay o pigs, col coop, tlooser and u.

Tue, 03/01/2011 - 02:27 | 1006252 walküre
walküre's picture

right. but it is besides the point.

why did the VIEW invite the opinion of Info Warrior Alex Jones?

hmmm... and why did Alex Jones accept?

it's not info wars. it's propaganda wars. in a war, the truth is the first casualty.


Mon, 02/28/2011 - 21:05 | 1005567 Buck Johnson
Buck Johnson's picture

Whoever booked Alex Jones in order to get the Charlie Sheen flap was played like a fiddle.  I love Alex, but they should have known that giving him a seat to the "big chair" on a daytime show with 30 million viewers helped him more so than it hurt him.  And thinking that Barbara Walters and the others would be able to control him where dead wrong. 

Mon, 02/28/2011 - 21:16 | 1005568 lynnybee
lynnybee's picture

well, i'm a woman & I KNOW.    i'm finally getting through to my son (cause i put some silver in his hand) & my daughter & even my sister is coming around.    i told her that the first thing she had to do was to accept that what i was telling her was fact.    if you accept certain things as being FACT, then, start to expand your knowlege through your own internet research.

Mon, 02/28/2011 - 21:25 | 1005611 Harmonious_Diss...
Harmonious_Dissonance's picture

Well, now why don't you listen to this about Alex Jones "facts":

Mon, 02/28/2011 - 22:03 | 1005694 israhole
israhole's picture

Thanks for the video. Jones is an Israel-first rat like the traitors in our government.

Mon, 02/28/2011 - 21:27 | 1005621 Harmonious_Diss...
Harmonious_Dissonance's picture

Here is some great Alex Jones FACTS from new years 2000, "The RUSSIANS ARE LAUNCHING NUKES!!" Alex puts out allot of truth, but he's an ego maniacal fear monger.

Mon, 02/28/2011 - 23:38 | 1005928 RockyRacoon
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Breaking news:  "allot" means to apportion or divide by shares.

I think you meant "a lot".  

Mon, 02/28/2011 - 23:50 | 1005959 Harmonious_Diss...
Harmonious_Dissonance's picture

good call. My apologies :)

Mon, 02/28/2011 - 23:24 | 1005892 samsara
samsara's picture


Just keep giving them articles.   At some point (as happened to me),  they start saying... "Hey that stuff you were saying ,,, I just read in the paper today....  Everything you said I see in the news 6 weeks later...."

Mon, 02/28/2011 - 21:53 | 1005678 Twindrives
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The Saudis learned to lie from the best, Obama. 

Tue, 03/01/2011 - 01:14 | 1006151 cougar_w
cougar_w's picture

Obama hadn't been born when the Saudis were already well into the lie.

Mon, 02/28/2011 - 18:24 | 1005181 JW n FL
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by Cognitive Dissonance
on Mon, 02/28/2011 - 15:43


Jim Rogers to Saudi Arabia. "Liar liar, pants on fire."



Tue, 03/01/2011 - 01:13 | 1006136 The Navigator
The Navigator's picture

Excellent post on peak (cheap) oil - Thanks!

Jim Rogers has picked some good winners in the past and I'd follow him anywhere. No BS, goes by the (easy to read) numbers, and plain logic. The only fly in the ointment to ANY perfectly thought out plan is GOVT INTERVENTION, which has screwed up most of the markets everywhere. I'd like to hear JR comment on this and how to hedge against govt intervention.

Mon, 02/28/2011 - 18:54 | 1005264 Arkadaba
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And Matt Simmons (lest we forget) was saying this quite a while ago:

Tue, 03/01/2011 - 00:49 | 1006089 Oh regional Indian
Oh regional Indian's picture

Ark, thanks for bringing Simmon's back to the table, bless him. Everyone was going ape then about how he was over the top and under the bottom (of the GOM). And while the whole GOM story has been dying on the vine (talk about brilliant perception management by Govt/BP), the real story, as it continues to filter out, is worse by the day.

The New Madrid Fault line is the target. Balkanization, it's what's for dessert.

Oil is the lever in this oil driven world. And they have it in their hands, firmly. And since we are like junkies now, cutting it off is the ultimate lever on people.

Looks like they are getting ready to use that lever for realz.


Mon, 02/28/2011 - 19:59 | 1005431 10kby2k
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Jim Rogers traveled around the world...twice. And not as a vacation...he was just a common guy.  I did this after high school and my perceptions of the world were forever changed.....and I realized how far off many peoples perceptions of what they haven't seen are. Jim Rogers says what he thinks and believes. He is modest. Because he has seen with his eyes what we all haven't I trust his judgement more than my own on these topics. His words actually carry weight in a world of talking heads and bull shit.

Mon, 02/28/2011 - 20:46 | 1005517 Nobody special
Nobody special's picture

That may be, but he's ridiculously conservative for someone with such wisdom.  Gold over $2000 by the end of the decade?  Silver over $50?  These are hardly epiphanies... understatements of a lifetime.  Inflation alone will push them much higher.  No doubt he knows this, why isn't he saying it?

Mon, 02/28/2011 - 21:16 | 1005592 zaknick
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He isn't saying it precisely because his words carry weight. Unfortunately, on this most sensitive of subjects he isn't willing to expose his fellow billionaires.

Yeah, $2,000 by the end of the decade? Puh-leeze

Along these same lines.... Tyler Durden used to tell us the Chinese were selling Treasurys; now he says they were the ones behind the English accumulators.... and that he knew it all along.


Mon, 02/28/2011 - 23:52 | 1005961 juangrande
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Tyler was at least suspicious all along. I remember reading articles where he postulated that someone else (the chinese perhaps) was buying treasuries through London. 

Tue, 03/01/2011 - 03:40 | 1006312 Assetman
Assetman's picture

I'll vouch for that as well.

Tue, 03/01/2011 - 03:17 | 1006293 Amagnonx
Amagnonx's picture

Rodgers knows the score - why isn't he giving a more realistic view of gold and silver prices?


Pretty simple - credibility.  When you make calls that are absolute certainty, and then they come true within a short time frame - people put a lot more weight on that then calling high side estimates that might take years to play out.


He knows those thresh holds will be broken within less than 2 yrs, possibily within 1 yr, or even 3-6 months.


When you say it - and it happens soon, then people will listen closely to the next prediction and start having some clue you are not guessing.


People have short memories.

Tue, 03/01/2011 - 08:07 | 1006435 Martel
Martel's picture

Gold $2000/oz. by the end of the decade means a four percent annual return, cumulative. Hell, even inflation exceeds that. Sure, Jim Rogers has past merits, but he sounds like a stockbroker.

Mon, 02/28/2011 - 20:51 | 1005530 Xkwisetly Paneful
Xkwisetly Paneful's picture

For a guy who made his money being a contrarian he sure is a member of the herd these days.

Mon, 02/28/2011 - 16:43 | 1004816 trav7777
trav7777's picture

Coulda told ya...bitchez

Mon, 02/28/2011 - 18:12 | 1005113 B9K9
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Anyone with a rudimentary knowledge of math would know that eventually the "neshek"  (ie usurywould begin to smart one day. It really was the ultimate "sell in May & go away" strategy writ large over generations. Once the debt-as-money scheme was firmly established amongst the global economy, it was all over except for the crying.

Funny how humanity had to literally plow through every known natual resource, and increase world population by some incredible multiple, just to keep Shylock at bay. And here comes the bill due anyway, just when the poor mice running the wheel are all tapped out. LOL

At a certain level, one should step back and survey the situation with sufficient aplomb to exclaim "well played sir"!

About the only remaining question is whether or not they will want to retain an army of serfs as a substitute for stored energy, or get rid of the whole lot of us in an effort to preserve what remaining stores are for themselves.

Mon, 02/28/2011 - 18:58 | 1005273 Arkadaba
Arkadaba's picture

About the only remaining question is whether or not they will want to retain an army of serfs as a substitute for stored energy...

You mean like this:

Mon, 02/28/2011 - 23:37 | 1005924 snowball777
snowball777's picture

Was thinking more like several hundred million Chinese riding bikes to charge up flywheels.

Let's get physical...physical...

Mon, 02/28/2011 - 23:21 | 1005880 samsara
samsara's picture

Great post as always k9

Some people don't understand geometric progressions.  Like the rule of 72(+/-)

Wages go up Linear

Interest goes up geometric.


My bet is they can't keep it together to serfville.  

Now,  Gene Specific Bioweapons....  Now that could do the trick.....


Tue, 03/01/2011 - 01:51 | 1006208 10kby2k
10kby2k's picture

and make of a world of drunk, foxy, sluts 

Tue, 03/01/2011 - 09:13 | 1006577 Ignatius
Ignatius's picture

"One need not necessarily scrape bottom, as it were, in order to view his society subjectively.  Rather than moving vertically downward, one might rather move horizontally outward where a modicum of creature comforts are not necessarily precluded.  And I was there, on the very rim of our age...."  from the Journal of a Working Boy


As per usual, K9, your perception and comments are spot on.



Mon, 02/28/2011 - 18:19 | 1005163 Rusty Shorts
Rusty Shorts's picture

but but Gull Island, Lindsey Williams said...

Mon, 02/28/2011 - 18:49 | 1005253 benb
benb's picture

The entire oil industry is a sham. No doubt about it. Artificial scarcity. Rogers is pimping for the Man. Williams’ Oil Non Crisis is likely accurate. Ken Fromm former C.O.O. of ARCO supplied the technical data and helped Williams write it. But hey, people love being swindled.

Mon, 02/28/2011 - 18:58 | 1005270 Rusty Shorts
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"Geologist Peter Barker didn’t sit in on senior oil company executive board meetings, but he did sit the Gull Island No. 1 well in 1976 (“sitting a well” is geologist speak for monitoring and interpreting the geologic evidence from a well while the well is being drilled). The objective of the Gull Island drilling was to test a deep structure on the north side of a geologic fault, to the north of the Prudhoe Bay field, Barker told Petroleum News July 7. The drilling proved disappointing, he said.

“There was an (oil and gas) trap there but there wasn’t an economic quantity of oil,” he said."

Mon, 02/28/2011 - 19:13 | 1005305 Flakmeister
Flakmeister's picture

Nice leg work....

Mon, 02/28/2011 - 19:27 | 1005357 benb
benb's picture

From your linked article-

“…allegations of massive oil find off the North Slope on Gull Island. Those allegations range from a business cover-up to a giant federal conspiracy to perpetuate our energy crisis,”  These allegations are very likely true. The article also states in part “…“Both the geologic evidence and the small area not yet developed into oil fields around the Gull Island wells preclude the possibility of a giant oil accumulation,” Bird said. But the Gull Island legend seems to persist…” Legend my ass. I read about this years ago. I’d bet good money massive producing wells are already drilled and capped just as has been claimed. This Petroleum News piece is nothing more than disinfo and propaganda. (IMO)

Near total control of energy allow these Globalist criminals to manipulate us. I had a very good friend, a DOE chemist, who was in on development from the start of the Strategic Petroleum Reserve. You’d be disgusted as I was if you heard about how that was put together.

During the 1973 ‘Arab Oil Embargo’ and its aftermath the general public could actually see parts of the scam as they played out. [The truth clampdown is much tighter now.] Once the ‘Embargo’ was announced gasoline prices shot up within four days where I was, although the affected supply would not reach the West Coast for six weeks. In the San Francisco area local news reported from the refineries that oil was in short supply but also flew their news helicopters twenty miles outside the S.F. Bay to the Faralon Islands where  oil tankers were literally ‘Parked’ sitting low in the water. The news people actually said, “The ships are low in the water because they are full of oil!” It was all a scam by Big Oil. And it still is!




Mon, 02/28/2011 - 20:35 | 1005498 Rusty Shorts
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"In the San Francisco area local news reported from the refineries that oil was in short supply but also flew their news helicopters twenty miles outside the S.F. Bay to the Faralon Islands where  oil tankers were literally ‘Parked’ sitting low in the water. The news people actually said, “The ships are low in the water because they are full of oil!” It was all a scam by Big Oil. And it still is!"


 - hmm, sounds like some sort of an Embargo to me.

Mon, 02/28/2011 - 20:48 | 1005522 benb
benb's picture

Yeah IIRC it was called the 1973 Arab Oil embargo. Only the Arabs were just a front for Big Oil screwing the American people over. Around that same period, friends of the family who were in the candy business (Supplying the bulk candy for Sears, then the largest retailer in the world IIRC) had something interesting to say. They said about six weeks before a massive unexpected increase in the price of sugar they were told to stock up ,which they did… It’s pretty much all rigged that’s what I’m saying

Mon, 02/28/2011 - 20:59 | 1005551 Rusty Shorts
Rusty Shorts's picture

Thanks benb, but you're preaching to the choir here.

Mon, 02/28/2011 - 21:46 | 1005665 zaknick
zaknick's picture

The oil embargo of 73 supposedly was a scam according to Another (Thoughts!). He said that with the 71 default fresh in the world's eyes, the banksters figured the world needed a push (pusherman!) in the direction of dollar usage. How? By driving up the one commodity priced in dollars that everybody needed: presto! Arab Oil Embargo psy op!

It's true that the genocidal maniac Rockefeller aka Mr Big Oil pulls the strings (in more ways than many could imagine).

I don't know if this translates into peak oil being fake. I don't think it's brainwashing and manipulating this time but what the hell do I know!

Mon, 02/28/2011 - 19:53 | 1005423 the rookie cynic
the rookie cynic's picture

So the whole world has been fooled about U.S. oil reserves for 30+ years? How'd they do that?

Mon, 02/28/2011 - 20:18 | 1005461 benb
benb's picture

No not the whole world. Just those who believe what they're being fed by The Man.They rule through effective total control of the mass media and the puppet Federal Government.  The apparatus showers the people with propaganda and lies. Bathes them in it. Keeps them in a state of stupidity from cradle to grave. War is Peace.


Mon, 02/28/2011 - 19:32 | 1005373 lynnybee
lynnybee's picture

right ........ the world is running out of oil ....until we open the GULL ISLAND field !  & then, we can charge $200/barrel for that oil !

Mon, 02/28/2011 - 20:27 | 1005483 benb
benb's picture

There is no 'we' lynnybee. The US is gone... an illusion conroled by our masters. It's just us peasants getting a Golden Shower from David Rockefeller and his pals. I won't stand around like some of his victims with my mouth open saying, "This is good, tastes like champagne."

Mon, 02/28/2011 - 21:31 | 1005633 Arkadaba
Arkadaba's picture

IMO, wouldn't count on it.

Mon, 02/28/2011 - 16:45 | 1004819 DeweyLeon
DeweyLeon's picture

"Gold will certainly go over $2,000 by the end of the decade, and silver will pass $50."


He thinks the dollar will survive the decade?

Mon, 02/28/2011 - 16:47 | 1004830 Misean
Misean's picture

Jim's in Singapore, IRRC. Must be talking Aussie $.

Mon, 02/28/2011 - 16:47 | 1004832 jus_lite_reading
jus_lite_reading's picture

That's $2,000 in New World Dollars, or $60 Trillion in current USD. He assumes everyone knows that already.

Mon, 02/28/2011 - 18:29 | 1005197 JW n FL
JW n FL's picture

For gold to equal its high in inflation adjusted dollars of today it would need to be $2,200+(ish) and silver would need to be $120+(ish)...


Thusly, buy low sell high... until you see Gold @ $2k or silver near $100... you are safe to buy.. FACT!

Tue, 03/01/2011 - 09:38 | 1006632 ft65
ft65's picture

Quoting JW n FL / GLP ^TrInIty^

For gold to equal its high in inflation adjusted dollars of today it would need to be $2,200+(ish) and silver would need to be $120+(ish)...  Thusly, buy low sell high... until you see Gold @ $2k or silver near $100... you are safe to buy.. FACT!

Hop back to the farm, and post this nonsense there. This post is about oil not Bob Chapman drivvel advice on how to buy gold and silver. You may be the guru (and owner) of where this sort of comment is considered as financial (along with the guns, ammo and preps.) People here at ZH are a little better informed in the understanding of such matters.

Mon, 02/28/2011 - 16:44 | 1004820 Misean
Misean's picture

Why would the Saudis lie about that? If you want mo' money for something, you say you got less, not more.

Mon, 02/28/2011 - 16:51 | 1004849 Max Hunter
Max Hunter's picture

Why would the Saudis lie about that?

Because we told them to..

Mon, 02/28/2011 - 17:14 | 1004919 Slartebartfast
Slartebartfast's picture

Because the Saudi's have always tried to keep the price of oil in the "sweet spot" of maximum profit but below encouraging development of competition.  Look at what happened when gas went over $4 a gallon years ago.  Ethanol plants started sprouting up like weeds.  They were everywhere in less than a year.  The oil Majors had to go around and buy them all up and close them down.  Cost a lot of dough.  Bad business letting the price go too high.

Mon, 02/28/2011 - 21:02 | 1005558 sun tzu
sun tzu's picture

Actually most of them went bankrupt like Verasun

Mon, 02/28/2011 - 21:26 | 1005616 Slartebartfast
Slartebartfast's picture

Slight correction.  Those that could not be bought were driven into bankruptcy by the drop in oil prices and shenanigans pulled by big oil.  It was a managed process, believe me.

Mon, 02/28/2011 - 23:22 | 1005885 financeguru500
financeguru500's picture

I was under the impression the EROEI resulted in miniscule profits for the ethanol refineries.

Mon, 02/28/2011 - 17:18 | 1004934 MolotovCockhead
MolotovCockhead's picture

Why would the Saudis lie about that?

Because the US had the Saudi Oligarchs by their balls!! They have their personal fortune invested in the US. If the US economy collapse, so do their fortune. No choice but to play along!

Mon, 02/28/2011 - 17:48 | 1005040 Careless Whisper
Careless Whisper's picture

@ Max

so you're saying that they're our bitch? i'm not so sure about that.


Mon, 02/28/2011 - 18:04 | 1005089 Nikao7
Nikao7's picture

I beg to differ Mr. Head.

US Mints ‘Gold Disks’ for Oil Payments to Saudi Arabia


It's the Flow, Stupid

Mon, 02/28/2011 - 18:25 | 1005188 Rusty Shorts
Rusty Shorts's picture

"The Western governments needed to keep the price of gold down so it could flow where they needed it to flow. The key to free up gold was simple. The Western public will not hold an asset that going nowhere, at least in currency terms. ( if one can only see value in paper currency terms then one cannot see value at all ) The problem for the CBs was that the third world has kept the gold market "bought up" by working thru South Africa! To avoid a spiking oil price the CBs first freed up the publics gold thru the issuance of various types of "paper future gold". As that selling dried up they did the only thing they could, become primary suppliers! And here we are today. In the early 1990s oil went to $30++ for reasons we all know. What isn't known is that it's price didn't drop that much. You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold! Today it costs $19 + XXX amount of gold! "


Mon, 02/28/2011 - 16:53 | 1004860 Azannoth
Azannoth's picture

In a missguided effort to make believe that we still got 30 years of oil left and current consumption rate, it's more like 10

But when we wake up and notice we ain't got anything to replace it with well SHTF

Mon, 02/28/2011 - 17:52 | 1005057 prophet_banker
prophet_banker's picture

i agree with you there, we are at the top of the bell curve now with rate of extraction, and in 30 years we'll be using less than now

Mon, 02/28/2011 - 18:54 | 1005263 Thorny Xi
Thorny Xi's picture

Given the global decline rate is about 7%, production will be one half of today's rate in 10 years.  Good luck with that.

Mon, 02/28/2011 - 20:23 | 1005475 Flakmeister
Flakmeister's picture

Now, to be fair, the rate of decline for existing field is 4.5 to 7%. It is a really tough number to measure. There are a few new fields that will come on as well. The best estimate from people whom I trust is a net fall off of about 3% or so a year... Still not good.  The killer is ELM... no idea what happens with that or how it plays out.

Mon, 02/28/2011 - 21:22 | 1005604 trav7777
trav7777's picture

which existing fields?  The more recent the field, and the deeper the water, the sooner to peak and steeper the decline.  If it's Cantarell, shit, hail mary for only 7%.

As for XLM, here's how it will play out...oil available for import will vanish.  You either take paper for your barrels and face riots or you try to placate the public that will hang you.

How long could ANY sovereign hold out if they are "selling" the oil for our dogshit paper?

Tue, 03/01/2011 - 11:51 | 1007091 DaveyJones
DaveyJones's picture


Tue, 03/01/2011 - 13:08 | 1007131 Flakmeister
Flakmeister's picture

Re: XLM, I am pretty aware what the implications and time scales are... I don't know if we are smart enough to not blow up the world along the way...

I don't make many predictions, but Venezuela will be the focal point by mid-2012. The US and China figure out a way to share it, or go to war. Just like Iran.

Mon, 02/28/2011 - 21:30 | 1005627 Slartebartfast
Slartebartfast's picture

I've been hearing EXACTLY that same line about the bell curve since the early 70's.  Even saw beautiful mathematical proofs that there would be not a single drop of oil to be had by 1980.  ALL THE SAME SHIT.  Yet here we are today with more oil than ever, still at the top of that bell curve.

Mon, 02/28/2011 - 23:23 | 1005887 Lower Class Elite
Lower Class Elite's picture

You been looking at the wrong bell curve chief. Regardless, "enhanced extraction methods" (ie: high cost energy intensive attempts to boost production) make it less of a bell curve and more like that alpine yodeller game on the Price Is Right. "Yo-de-lay-de-yo-de-lay-de... Oh fuuuuuuck!". Splat.

Tue, 03/01/2011 - 11:54 | 1007100 DaveyJones
DaveyJones's picture

"at the top of that bell curve" - gee I feel better already

Mon, 02/28/2011 - 20:55 | 1005536 Xkwisetly Paneful
Xkwisetly Paneful's picture

Said that 10yrs ago and will say it 10yrs from now.

Mon, 02/28/2011 - 17:01 | 1004874 cougar_w
cougar_w's picture

It's complicated. OPEC production quotas are partially determined by reserves, so misstating reserves upwards means short-term output increases under contract. Also end user consumption contracts are always predicated on a sense of long term availability. If everyone suddenly understood that the-end-of-oil (for lack of a better term) were 10 years off then nobody would open a contract for delivery that extends past 10 years, and probably not past 2 years. Transportation planning would turn on a dime towards more electrified mass transit and away from accomodation of personal automobiles and trucking (read, road building and maintenance). This would amount to demand destruction apart from pricing and would tend to drive prices down rather than up. SA and OPEC want to sell every last barrel of oil at the highest price into greatest demand, and then abruptly close shop. They don't give a tinker's dam what happens after. They will have already sponged up all the world's wealth via their geological resource, and will then do as they like in a declining situation.

Mon, 02/28/2011 - 17:13 | 1004918 Sean7k
Sean7k's picture

Great insight.

Tue, 03/01/2011 - 11:54 | 1007108 DaveyJones
DaveyJones's picture

second that

Mon, 02/28/2011 - 17:17 | 1004929 Cognitive Dissonance
Cognitive Dissonance's picture

You mean they're acting in their own best interest? Shame on them. I thought they were just dumb ass sand monkeys. At least that's what the average Joe wants to think as he fills up his SUV with his entitlement of sub $3.00 per gallon oil. Well........average price anyway. :>) 

That slurping sounds isn't oil coming out of the ground, but rather wealth rotating to the ME.

Mon, 02/28/2011 - 17:48 | 1005039 cougar_w
cougar_w's picture

Yes, but think of SA as the basket with all the eggs. When the bad day goes down, someone is going to be sitting off the coast of SA with 50 warships "helping" the ruling family in exchange for "information" about where those eggs are.

Does GS have a navy? Probably not. Can they rent one for a couple days? Oh I think they probably can. So at the end of the day concentrating wealth just leads to one castle to storm.

Mon, 02/28/2011 - 17:55 | 1005064 DeeDeeTwo
DeeDeeTwo's picture

Too bad they blew it on hookers and blow. 50 years from now Saudi Arabia will be back to milking camels and pounding sand, baby.

Mon, 02/28/2011 - 18:32 | 1005205 SashaBelov
SashaBelov's picture

On the long enough timeline...

Mon, 02/28/2011 - 18:32 | 1005206 SashaBelov
SashaBelov's picture

On the long enough timeline...

Mon, 02/28/2011 - 19:33 | 1005376 New_Meat
New_Meat's picture

and those Dubai sand-thingies off shore...

Mon, 02/28/2011 - 17:27 | 1004969 ColonelCooper
ColonelCooper's picture

Because the Saudi's like our warplanes and "influence" on their side.  If they admit to having less oil, they lose relevance.

Mon, 02/28/2011 - 22:38 | 1005766 william the bastard
william the bastard's picture

Like they give a fuck what you think.

Mon, 02/28/2011 - 17:57 | 1005071 Kelly
Kelly's picture

Opec agreement allows production based on reserves, the more reserves you 'have' the more you can pump and sell. All the Opec countries over stated their reserves so they could sell more in the short term. 

Mon, 02/28/2011 - 20:01 | 1005440 gmj
gmj's picture

The Saudis need tech help from Big Oil.  They won't get it if Big Oil thinks there isn't much crude left.

Mon, 02/28/2011 - 20:07 | 1005450 gmj
gmj's picture

The Saudis need tech help from Big Oil.  They won't get it if Big Oil thinks there isn't much crude left.

Mon, 02/28/2011 - 16:45 | 1004823 jus_lite_reading
jus_lite_reading's picture

I'll believe it when I see it. They can talk about this miracle discovery lost production but until it starts flowing, I ain't buying.

Where is a giant BULL SHIT flag when you need it?

Mon, 02/28/2011 - 19:16 | 1005317 Creed
Creed's picture

I was thinking like this too...but then I read about the huge new off shore field discovered off South America recently. Williams may be full of it on THIS one but don't buy into the "woe is me" crowds BS.

Mon, 02/28/2011 - 16:46 | 1004825 LFMayor
LFMayor's picture

Agghh, he looks like Jimmy Carter mated with Orville Redenbacher.

Mon, 02/28/2011 - 17:04 | 1004884 Cash_is_Trash
Cash_is_Trash's picture

And Marc Faber has a ponytail.

But still Rogers, Faber, Schiff... they're all the shit.

Real FUCK YOU money amongst them.

Mon, 02/28/2011 - 17:28 | 1004978 Cow
Cow's picture

Great contribution, LF

Mon, 02/28/2011 - 17:47 | 1005036 LFMayor
LFMayor's picture

Thanks, Bitch.  Be sure to tip your waitress.

Mon, 02/28/2011 - 18:25 | 1005186 mtomato2
mtomato2's picture

I am beginning to totally dig the bow tie, though.

When I see it, I know its time to listen.

Mon, 02/28/2011 - 22:02 | 1005692 zaknick
zaknick's picture

Tom Keene has one and he's as dumb as they come. It's an affectation with him though.

Mon, 02/28/2011 - 19:22 | 1005340 barkingbill
barkingbill's picture

and has made more money then u ever will

Mon, 02/28/2011 - 19:35 | 1005381 New_Meat
New_Meat's picture

and, on his association with Soros has said: "come on, that was 40 years ago."

- Ned

Mon, 02/28/2011 - 16:46 | 1004826 Life of Illusion
Life of Illusion's picture



One thing Saudi is not lying about, they demand higher oil prices when sold in devaluating dollars.

Mon, 02/28/2011 - 16:51 | 1004850 walküre
walküre's picture

The Saudis just promised their people 36 billion in goodies.

That's the equivalent of 360,000,000 barrels of oil.

Or 1 million per day, every day for a year.

Gosh, I'd love to be a sheik and be able to pay my bills in oil. More bills? Just open up the spiggots and sell more oil. Ah, life is good as a sheik.

What? The oil fields are slowly depleting?????


Mon, 02/28/2011 - 16:47 | 1004834 Gene Parmesan
Gene Parmesan's picture

By the end of the decade? In USD? So he's bear-ish on gold?

Mon, 02/28/2011 - 16:49 | 1004844 Misean
Misean's picture

He's just being cagey. Remeber all the debate over what year constitutes the end of the century?

Mon, 02/28/2011 - 16:47 | 1004836 walküre
walküre's picture

Bought the dip.

Mon, 02/28/2011 - 16:47 | 1004839 Snidley Whipsnae
Snidley Whipsnae's picture

Thanks Jim... from all who are holding out of the money crude calls...

Mon, 02/28/2011 - 16:51 | 1004845 cougar_w
cougar_w's picture

I've said it here before: In the battle with speculators, SA can threaten to increase production and keep prices low. They don't even have to produce one additional barrel of crude and accomplish 90% of their price control desires.

But that works only for a little while. After a period of speculators testing SA resolve with no clear response, the speculators will make their move. What will be lost is not price controls, but any sense that SA is in control at all.

At that point things will get ugly. The oil play is the play for the next 10 years. All the way to the bottom. The quantity of money to be made here is simply astronomical.

Mon, 02/28/2011 - 16:57 | 1004870 disabledvet
disabledvet's picture

There's also the "pesky problem of the greed thing."  So what if SA still has the oil?  All that means is "SA has the oil and you don't."  The USA is far from lacking in "oil substitutes" needless to say and as any nat gas trader can attest to.  Talk about "being carried out on your shields."  Still--"we have a technology gap."  In short "our entire transportation system runs on the goo."  Why the TV media never asks the question "if it's all about choice why don't we choose well?" will be one for the ages.  Perhaps they get a rich husband out of the deal?  And I'm including "the media guy folks" in that one as well. 

Mon, 02/28/2011 - 17:09 | 1004903 cougar_w
cougar_w's picture

There is no substitute for crude oil for the things in which it is heavily used. I've seen all the arguments on the topic, and that's where it stands in my mind. That means that automobiles, trucking, the entire airline industry and most leisure travel are on the chopping block. Right now. There is no technological fix here. The stored energy in oil is what is at stake, not energy in general. There is no other source of portable stored energy on earth to compete with oil for the applications given above. Coal is best at producing electricity (CO2 issues aside) which points to mass transit and centralized planning, which the portability of oil largely eliminated. That period is over. Centralized transportation planning and development is all that remains (again, CO2 issues not even being considered)

Mon, 02/28/2011 - 19:12 | 1005299 Arkadaba
Arkadaba's picture

Hi Cougar, I agree with everything you said above but you forgot to mention one big one which is food. Food production and delivery in North American is heavily dependent on oil.

Mon, 02/28/2011 - 21:07 | 1005571 naughtius maximus
naughtius maximus's picture

Oil is king but natural gas and NGL can be a decent alternative. They will run out aswell but when gasoline becomes 6 dollars a gallon the natural gas angle will all of sudden become mainstream. Natural gas is at an incredibly depressed price level compared to all other commoditys, especially energy. 

Powering a combine with natural gas does seem a bit far fetched though.

Tue, 03/01/2011 - 00:07 | 1005976 RockyRacoon
RockyRacoon's picture

Powering a combine with natural gas does seem a bit far fetched though.

Already been done:

I worked at a butane/propane distributor back in the early 1980s and we converted everything that could burn gasoline or diesel to LPG.   That included all the City buses!   They ran just fine and the conversions, done on scale, cost only a few hundred dollars per vehicle.

Tue, 03/01/2011 - 06:02 | 1006365 John_Coltrane
John_Coltrane's picture

Coal can be liquefied and become the total basis of the entire chemicals and fuels industry.  It has more high value aromatic content than any crude.  And direct liquefaction, unlike combustion, doesn't produce CO2.  Germany based their entire fuel and chemicals on coal in WWII and South Africa via SASOL does it right now.  So with nuclear for electricity and coal for chemicals and fuels (augmented by natural gas) crude isn't necessary. 

Mon, 02/28/2011 - 17:13 | 1004920 Flakmeister
Flakmeister's picture

Hard to quibble with lot of what you wrote, but there is no "oil substitute" in the US. For the record, we have not exceeded the peak in dry gas production from 1970. That may change, but all NG may do for us is smooth the transition to whatever lies ahead. 

 If you look at the trillions of dollars in phantom housing equity that went kaboom, we could have payed for a whole bunch of goodies, had a crash, and when the smoke cleared there might have been something left of tangible value. Instead we walked down the path of least resistance and took all too many steps closer to a group enabled assisted mutual suicide.

Mon, 02/28/2011 - 17:50 | 1005045 disabledvet
disabledvet's picture

there is an oil substitute--we've had nat gas vehicles in the USA for decades--drove one in "oil rich Alaska" back in the 80's.  what we are lacking is of course that most "elusive" of things called "political will."  i ask you, then--is the reason the USA which defeated both Germany (with help obviously) and Japan (without any help whatsoever just as obviously) is "capable" of finding a solution--or just "capable of not finding one."  Obviously as the former owner of GM (that would be you and me btw) we all know the latter is in fact true.

Mon, 02/28/2011 - 17:54 | 1005062 cougar_w
cougar_w's picture

Natgas doesn't scale for transportation. I know people who drive on fry oil from restaurants, also doesn't scale.

Nobody is arguing if there are other ways to do things. The question is scale. If you cannot get the scale issues resolved then you have not solved the problem.

Mon, 02/28/2011 - 19:18 | 1005325 eddiebe
eddiebe's picture

We are rapidly running out of time to change infrastructure, let alone time to ramp up alternative energy sources, to transit to a different mode of transportation, and all those things that easy oil is facilitating. At least given the information that I have.

 I just have to wonder if the elite planners of what is in store for all of us,( they must surely include their offspring in the equasion even if they dont give a flying about us plebes) have alternatives up their sleeve that they will feed into the system as they please to maximise power and profit to themselves.

 It is hard for me to believe they would be short sighted enough to just allow us to backslide to amish type lifestyles.( I highly respect amish.)

 Of course it could be that they are planning an event that will wipe out 50% or more of us, I suppose that would make a lot of sense. (Mother nature may do that for us anyway.)

 Does anybody in Z.H. land have similar suspicions?

Mon, 02/28/2011 - 19:35 | 1005383 cougar_w
cougar_w's picture

The question of ultimate motives is a popular one here. One should take such things with a grain of salt, is the usual recommendation.

Myself, I tend not to give these "smartest guys in the room" much credit for smarts. They are clever, they are sneaky, most importantly they have insider information. But as for smarts, not so much. There is plenty of evidence that they have actually shortened their run, not made it longer, by some of their nonsense. I think that is the essence of all Ponzi operators; faith, more faith, nothing but faith, and then you run away with your hair on fire.

They just want the money. They don't actually care about anything else. Once they have the money they imagine they can turn it around and buy anything that they've actually lost. If things get dicey they can buy an island, populate it with uneducated slaves, and enjoy a Feudal lifestyle until they die and then gift their holdings to their sons.

Seriously. If any of them think past get all the money then that's where they wind up.

The observation that there are not enough isolated islands to sequester all the rich vermin of the world never occurs to them. Nor do they wonder how they'll be fed when the world winds down around them nor who will rescue them when a Cat5 typhoon scrapes them off their 2 meter elevation atoll and deposits them in the Marianas Trench.

Rich, greedy, selfish and stupid. Coming to a 200 acre island near you.


Mon, 02/28/2011 - 23:18 | 1005869 Minimum Clearance
Minimum Clearance's picture

This is one of the more astute comments I've read on Z.


Mon, 02/28/2011 - 23:51 | 1005960 woolly mammoth
woolly mammoth's picture

I agree with MC, well Worth the read Cougar.

Tue, 03/01/2011 - 03:40 | 1006313 mojine
mojine's picture

Masterpiece, Cougar. Bravo!

Mon, 02/28/2011 - 19:53 | 1005419 New_Meat
New_Meat's picture

eddiebe: you ask really good questions.  Following are some thoughts (although not very "positive" for some kind of resolution).

"running out of time to change infrastructure"

Like a 30 year project?  Yep, outta' time.

"ramp up alternative energy sources?"

The reason that they are alternative is that, well (I'm going to drop into tech-speak here) they suck.  They are neither economical nor are they reliable on the total energy delivery system basis.  Otherwise, well, they would have been a firestorm and taken over the world in like 1880.

Elite planners?  Ever met anyone who buys all family food from "Zone Manhattan?"

did that answer your question?

Amish style lifestyle?  Kinda' good, as are the Amanas and others.  Of course, it requires all hands to work their as... "fingers to the bone."  Like all the time.  and the detergent really messes with them fingernails.  It is truly unfortunate that in the Amanas, they fatten up my brothers and sisters for the eventual ... I can't go on.  (really intersting history there in many respects)

and yes, some event that wipes  out significant population has been discussed here.  Tom Clancy did one of his Jack novels about same (and what a great ending).

Welcome to uncertainty.

- Ned


Mon, 02/28/2011 - 21:16 | 1005465 gmj
gmj's picture

We can't backslide to Amish type lifestyles.  There are too many of us.  I believe TPTB are not addressing the energy depletion issue because there is no politically salable solution.  Nothing can replace oil over the full spectrum of its uses.  Conservation is probably the best option we have right now.  But that means economic contraction, big reduction in US consumption and "quality of life", and big unemployment.  All of this at a time when we are already broke.  Joe Sixpack would never buy it.  Hell, half the posters on here don't think there is an energy problem.  So we do nothing and wait.

Mon, 02/28/2011 - 23:51 | 1005957 samsara
samsara's picture

 Of course it could be that they are planning an event that will wipe out 50% or more of us

Google the holy grail of answers.

Gene Specific Bioweapons... 

Now why was there that push for the Human Genome  Project again???

Mon, 02/28/2011 - 20:01 | 1005437 disabledvet
disabledvet's picture

we have city buses that run on natural gas and have for decades.  can't scale?  you know how many people you can fit on a city bus with "daily ridership"?  the word "millions" come to mind.  i agree "you can't scale up an interstate highway system"--give the world a break otherwise:  we wait for the idea of profit, that's all.  "what's in it for me" is all Wall Street has ever asked--and the purpose of government is to stand opposed to this not in league with it.  and one need not even be a "critic of greedy" to understand this.  needless to say "if anarchy is all you want" then you have "arranged this quite well."

Mon, 02/28/2011 - 20:21 | 1005470 cougar_w
cougar_w's picture

I ride the bus and take the train to work nearly every day. Buses and really good trans-continent rail would save us as a country, but would doom the auto industry and their supporting suppliers and infrastructure and gasoline taxes and registration fees and sales taxes, which all together are maybe 15% of US GDP (just guessing on the figure, feels about right).

Besides, if people don't have a Ford F350 diesel to drive 6 blocks to the TastyFreeze, the terrorists win.

We are in agreement. My point perhaps was only that Business As Usual (tm) is fooking doomed in a post-peak world.

Mon, 02/28/2011 - 22:24 | 1005745 zaknick
zaknick's picture

Business as usual doomed? Good, way too many monopolies and barriers to entry for entrepreneurs. Local and regional scale atomized economies will provide much more opportunities for smaller entrepreneurs than the old, old set in stone oligarchic economy we have now.

That is if they dont visit a "mass extinction event" upon us - which I wouldnt put it past them AT ALL.

Mon, 02/28/2011 - 22:45 | 1005786 JW n FL
JW n FL's picture
by cougar_w
on Mon, 02/28/2011 - 19:21


Besides, if people don't have a Ford F350 diesel to drive 6 blocks to the TastyFreeze, the terrorists win.


Hay!! Hay!!! Now lil lady... lets settle down now... simmadownnow even.. hitting a little close to home on that one...

and dont forget...

If you dont have a 1,000 plus horse power Power Stroke... you are part of Al Qaeda!!!! and a Nazi!!!! and a fucking Commie Pinko Bastard!!!! only Homo's let friends drive Chevy's!!! (no offense to the gay community meant)

Tue, 03/01/2011 - 14:59 | 1008084 ft65
ft65's picture

Quoting JW n FL / GLP TrInItY - If you dont have a 1,000 plus horse power Power Stroke... you are part of Al Qaeda!!!! and a Nazi!!!! and a fucking Commie Pinko Bastard!!!! only Homo's let friends drive Chevy's!!! (no offense to the gay community meant)


Tue, 03/01/2011 - 06:30 | 1006379 Popo
Popo's picture

Exactly DV,  buses are the way to go.   Gasoline prices are only an issue because we have this completley insane idea that we should each drive a two ton piece of plastic, steel and glass that on average costs 2/3 of the average annual income.


Cars are a completely insane, stupid idea.  Amazing to see people on Federal support complain that the cost of car ownership is "too high", as if car ownership is rational.

Buses are the way to go.  Very little new infrastructure is required -- and the savings are massive.

Tue, 03/01/2011 - 00:19 | 1005997 RockyRacoon
RockyRacoon's picture

Natgas doesn't scale for transportation.

Whaddaya mean?  As I commented above, I worked for a propane/butane distributor for a time.  "Scale" was incremental.   It was ramped up as needed.   Tanks were placed where needed.   Scaling is progressive.   We serviced the City bus system which had their own tanks, farmers with tanks, homes and businesses.   Conversion takes time and with it comes the infrastructure.   We had transports made in every imaginable size by an in-State company that specialized in high-pressure tanks and truck conversions.   The industry is already there waiting for the signal.   Your imagination is laking!

Tue, 03/01/2011 - 00:48 | 1006087 cougar_w
cougar_w's picture

My imagination is probably not the problem, my lack of experience might be tho.

Here's the problem as I see it: Not every place has natural gas nearby, but every place has roads and cars wanting to use them. Just as with petroleum distilates (gasoline and deisel) you have a distribution problem. So maybe we can solve that with a new fleet of transports and pipelines. Lots of work and money, but not intractable. Then there is the sourcing issue. Our entire liquefication infrastructure is serving the niche needs of maybe 1% of the rolling stock. But again, it's just a matter of money and time, right? Put in 100X the capacity and problem solved. However ultimately you have to get the gas out of the ground and distributed around the continent to all these (supposedly local) processing plants. I don't know it for a fact, but I suspect that the current extraction footprint is about enough to meet heating and electrical generation requirements and not a whole lot more; why would anyone build 10X more capacity than they need? But again, time and money and it's sorted out.

So yes it can be done. I said it could be done, and I said it was a problem with scale. That was a deliberate distinction, and a really important one. It's just money and time and oh look we don't have any of either.

That's the tragedy here. We could have done it, at one time. We could have turned this whole thing around and gone LNG for most uses. Over the span 20-30 years, at great expense and political commitment. But we didn't. And now, we won't because we can't.

We agree in principle. I just happen to think that ship has sailed.

Thu, 03/03/2011 - 23:26 | 1017392 RockyRacoon
RockyRacoon's picture

The ship is loaded and sitting at the dock.  All that is needed is $5 gasoline.

Don't short sell the LPG distributors and the really hard working folks in that field.   There are some ingenuitive and clever people who deal with this stuff every day.   I've worked with them and have a respect for their ability to overcome some very obstinate roadblocks.   The only shortage will be finding good welders.

Mon, 02/28/2011 - 23:48 | 1005950 OddFieldIsStrong
OddFieldIsStrong's picture

If you look at the trillions of dollars in phantom housing equity that went kaboom, we could have payed for a whole bunch of goodies.

Well it does not work that way. There was never really any real wealth, just "trillions of dollars in phantom housing equity" that is marked to fantasy. The "trillions of dollars in phantom housing equity" could not have been used to do anything real. At best the raw ingredients, energy and time required to build the excess housing stock could have been used more wisely, and invested into R&D and infrastructure. That sum would be billions, not trillions.

Mon, 02/28/2011 - 16:49 | 1004847 SilverIsKing
SilverIsKing's picture

Faber is mentioned in the post.  A slip or was he hiding in the background?

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