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Stephen Schork: The Commodity Crash Is "A Canary In The Coal Mine For The Global Economy"

Tyler Durden's picture




 

The best thing about the commodity crash relapse taking place so quickly after the last swoon - recall tha we have had two oil bear markets within 8 months - is that all those hollow chatterboxes and econo-tourists who swore that tumbling oil is "unambiguously good" and "great for the economy" (first and foremost Larry Kudlow and then proceeding with every single sellside strategist and economissed), have been laughed out of even CNBC's studio, and are nowhere to be found this time around because not only did all those promises of a surge in consumer spending never materialize (for reasons, or rather one reason which we explained extensively before), but the observent public still remembers all too well how countless 'experts' confusing cause (a gobal slowdown in the economy) with effect (crashing commodities).

Therefore, we were delighted when someone who actually understands the energy market for a change, The Schork Report's Stephen Schork, appeared on BBG's Pimm Fox yesterday to explain not only what the immediate future holds for both oil and gasoline prices, but why, when one actually gets cause and effect right, "this drop in oil prices, this drop industrial metal prices, this is not good. It's a canary in the coal mine that something is not right in the global economy, and that is a concern for us all."

The full interview is below, here are the key spot-on highlights, first about the futures of commodity prices :

... from a demand perspective on the seasonal front, it's August 7. We only have four more weeks left of summer driving, then the peak gasoline season is over. Then we head into the fall where the fall turnaround; that is the refinery maintenance season begins. So refineries will scale back in their crude oil purchases. So right now we are at the peak of the demand season. Demand is only going to fall between now and the end of the year.

 

On the supply side we are still producing. Regardless of what the oil bulls will tell you about the pullback in production, or the anticipated pullback in production, we have not yet seen it, and we will not see significant pullback I believe through the end of this year. So you marry those two facts together, fall in demand, strong production, i.e. I do think oil prices are headed below $40 a barrel in the latter half of this year.

Then a repeat of what we first explained in "It's Official: Americans Spent All Their "Gas Savings" On Obamacare"

FOX: All right. So, Stephen, let's say that gasoline ends up being around $2.00, $2.10 a gallon by the end of the year, that extra money that people are not spending on gasoline, going to go somewhere else? 

 

SCHORK: Yes. It's going to go to a big government health care. Look, I spend $100 -- and I'm saving $100 a week at the pump, excuse me, $25 a week, $100 a month, but my health care premium went up $160 a month for my family. So I'm still diggings $60 in.  

 

And so that's the big misnomer here, Pimm. People tend to think that this pullback at the pump is somehow good. No. It's a zero sum game because, yes, those dollars are being spent elsewhere, but those are not additional dollars being spent elsewhere. We're just moving the pieces around on the chessboard. We're not creating economic growth.

Putting it all together:

And this is the big concern because we keep on thinking that lower energy prices are somehow good for the economy. That can't be, because energy prices or commodity prices in general don't drive economic growth. Economic growth drives commodity prices.

 

So we have the rout in oil prices. We have the rout in copper prices, in aluminum prices. If we look at the industrial metals complex, that's now trading at lows not seen since the recession. We're looking at bellwethers such as Caterpillar, a bellwether of industrial production. That stock is trading again at a post-great recession low.

 

So there are a lot of telltales out there that this drop in oil prices, this drop industrial metal prices, this is not good. It's a canary in the coal mine that something is not right in the global economy, Pimm. And that is a concern for us all.

Full interview with Stephen Schork after the jump:

 

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Sat, 08/08/2015 - 11:48 | 6404719 SamEyeAm
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"The more the plans fail, the more the planners plan." - Ronald Reagan

Sat, 08/08/2015 - 11:54 | 6404742 GMadScientist
GMadScientist's picture

You should really credit the speech writers; that monkey's sidekick didn't come up with a single one of those great one-liners.

Sat, 08/08/2015 - 11:58 | 6404751 SamEyeAm
SamEyeAm's picture

I should really put my foot up yer ass and turn it a couple of times, leftist fucktard (redundant).

Sat, 08/08/2015 - 12:33 | 6404846 americanreality
americanreality's picture

Sam you seem to have anger issues.  You should talk to your therapist about it.  

Sat, 08/08/2015 - 13:28 | 6405022 SmedleyButlersGhost
SmedleyButlersGhost's picture

Memo Re Angry People: 

Out of curiosity - angrily pounded in Americunt, 'Merica, Nazi and libtard repeatedly.  Preliminary indications are that the 'c' and 'n' keys blow out first. 

Sat, 08/08/2015 - 18:20 | 6405678 Chris88
Chris88's picture

Which years of the Reagan presidency did the debt fall and did federal expenditures fall?  I counted for you: zero.  Don't know why he was worshipped when practically speaking he was a leftist.  

Sat, 08/08/2015 - 12:05 | 6404759 Creepy A. Cracker
Creepy A. Cracker's picture

LOL.  Reagan Derangement Syndrome lives on.  You poor little thing - if you can't afford them Obamacare has "free" mental health drugs for that now.

Sat, 08/08/2015 - 12:23 | 6404819 Spacemoose
Spacemoose's picture

"Until Alzheimer's disease wreaked its gradual destruction, Ronald Reagan was an inveterate writer. He wrote not only letters, short fiction, poetry, and sports stories, but speeches, newspaper articles, and radio commentary on public policy issues, both foreign and domestic. Most of Reagan's original writings are pre-presidential. From 1975 to 1979 he gave more than 1,000 daily radio broadcasts, two-thirds of which he wrote himself. They cover every topic imaginable: from labor policy to the nature of communism, from World War II to the second Strategic Arms Limitation Treaty, from the future of Africa and East Asia to that of the United States and the world. They range from highly specific arguments to grand philosophy to personal stories."  Kiron Skinner

Sat, 08/08/2015 - 12:27 | 6404833 johngaltfla
johngaltfla's picture

He's one of the few commodity/oil experts that I would trust to offer unbiased, honest analysis. When he says things like this, I pay attention.

Sat, 08/08/2015 - 19:14 | 6405791 New_Meat
New_Meat's picture

you did a better explanation to GMS than I did, but I doubt that it will do any research at all, given his case of RDS.

- Ned

Sat, 08/08/2015 - 12:40 | 6404865 New_Meat
New_Meat's picture

Yo, GMS:

"that monkey's sidekick didn't come up with a single one of those great one-liners."

Next time you are visiting the Capital District (where life is really good) swing by the national archives and check out the preserved legal pads.

Let us know what you come up with.

- Ned

Sat, 08/08/2015 - 12:47 | 6404883 Midas
Midas's picture

But it takes a Rhodes scholar to be able to pontificate on the meaning of the word "is". 

Sat, 08/08/2015 - 14:33 | 6405210 Village-idiot
Village-idiot's picture

It also takes a Rhodes Scholar to redefine what constitutes a "lie".

Sat, 08/08/2015 - 12:45 | 6404879 Dragon HAwk
Dragon HAwk's picture

Even with a speech writer you get right of refusal and editing ..  unless of course your Obama then  you read it hot for the first time right off the press like a  machine

Sat, 08/08/2015 - 12:54 | 6404909 hopefulbutwary
hopefulbutwary's picture

Very astute.

Sat, 08/08/2015 - 13:50 | 6405093 Whootie_who
Whootie_who's picture

".... like a machine"

or a sockpuppet

 

Sat, 08/08/2015 - 15:59 | 6405404 Macon Richardson
Macon Richardson's picture

Great Reagan quote! Of course the plans fail. If they succeeded, the planners would be out of a job. In the planning world, nothing succeeds like failure.

Sat, 08/08/2015 - 11:52 | 6404735 Sanity Bear
Sanity Bear's picture

Interest rates were the canary in the coal mine.

 

Commodities are more like a dead parrot that was only on the perch in the first place because it had been nailed there.

Sat, 08/08/2015 - 12:11 | 6404793 Carpenter1
Carpenter1's picture

2008: "Lehman doesn't matter"

 

2015: "Low oil prices are a net benefit"

Sat, 08/08/2015 - 14:19 | 6405184 sun tzu
sun tzu's picture

Low oil prices are a net benefit for net oil importing countries, but it's also a symptom of:

1. a deteriorating economy using less fuel

2. malinvestment due to too much "free" money

Now comes the pain

Sat, 08/08/2015 - 12:14 | 6404800 KnuckleDragger-X
KnuckleDragger-X's picture

Commodities are the elephant in the room. Not only are oil and metals taking a dump, but the entire commidity market is sick and the Keynesian horde is about to discover the law of supply and demand actually exists in the real world. The socialist's are also about to run out of other peoples money with the free shit army as the barbarians actually inside the gates.....

Sat, 08/08/2015 - 12:38 | 6404861 americanreality
americanreality's picture

Ahhh, so that's it.  The "socialists" brought all of this on.  Damn it! 

Sat, 08/08/2015 - 12:55 | 6404912 KnuckleDragger-X
KnuckleDragger-X's picture

Yep, and look at who has been funding and supporting them......

Sat, 08/08/2015 - 14:06 | 6405145 max2205
max2205's picture

Just tax all commodities like tobacco and prices will go up forever 

Sat, 08/08/2015 - 14:28 | 6405201 sun tzu
sun tzu's picture

An unelected board of governors controls interest rates and manipulates the asset and equities markets. In a free market those parasites on Wall St would have been flattened in 2008. Instead they are bigger and more wealthy and powerful than before. 

Sat, 08/08/2015 - 20:37 | 6405913 Pipetex
Pipetex's picture

Well, according to this guy, supply and demand only works one way... there are laws of the universal kind and then the market ones.

Sat, 08/08/2015 - 13:51 | 6405097 SWRichmond
SWRichmond's picture

Interest rates were the canary in the coal mine.

+1.  Market manipulation goes mainstream, overt, bragged about, via creating $Trillions out of thin air.  Instead of grabbing his kevlar underwear, Mr. Market cheered!  This, in turn, was the "tell" that Mr. Market is not really a market at all, but rather a collection of the 1%-ers who knew they'd be the beneficiaries of QE, and also knew it would not only help them maintain their 1% status, but would in fact strengthen it.

Thus, no surprise that their bought and paid for media and bought and paid for politicians cheered it, too.

One final point: the "tell" that it is not really "capital" which is being created, is the fact that it is not being reinvested in plant and equipment.  It is simply being used to accelerate the vampiric siphoning-off process we see as "stock buybacks".  In other words, it is in fact being used to take capital out of the market.

Sat, 08/08/2015 - 20:56 | 6405943 Government need...
Government needs you to pay taxes's picture

I think a number of manufacturing companies DID use the QE-capital to invest. . . in 2008/9/10/11/12.  But that MALINVESTMENT created the current situation we see with companies like CAT.  They have saturated/satiated the demand for long-lived construction equipment.  Now, companies like APPL. . . they bot back shares and gave the world the iWatch during the same period. But even the techsters look like choirboys relative to the banksters, who look good only next to the dirty rats in DC.  

Sat, 08/08/2015 - 11:53 | 6404740 GMadScientist
GMadScientist's picture

I love that Fox insists on perpetuating the reduced oil prices implies reduces prices at the pump meme. Fucking morons.

The American consumer will have zero more dollars to spend than they had before and petrochem companies will pocket the difference.

Sat, 08/08/2015 - 12:05 | 6404771 Creepy A. Cracker
Creepy A. Cracker's picture

And the government makes roughly 400% MORE eeeeeeevil "profit" per gallon of gas than the oil companies.  At least the oil companies make their profits selling something that people freely want to buy.

Sat, 08/08/2015 - 14:03 | 6405135 Village-idiot
Village-idiot's picture

That's exactly what dictators, left-wing politicians, and other control-freaks hate about all free-enterprise.

Sat, 08/08/2015 - 12:01 | 6404753 withglee
withglee's picture

Economic growth drives commodity prices.

Supply and demand drive commodity prices. Demand can be dropping (i.e. not growing), but supply can be dropping faster, and thus prices can be rising in the face of declining demand.

This business that we must have "growth" to have a robust economy is absolute nonsense. But it's probably why the controllers of our economy insist 2% is the proper level of inflation (and deliver 4%). It gives the illusion of growth which they claim is necessary for a healthy economy.

We all work to be more efficient. Some of us actually work ourselves out of a job. If it's our own company, we are well rewarded for doing that. If not, we are discarded. We need to learn to bask in our efficiency and enjoy the leisure that results.

The current framework we work and live in doesn't allow that. And the downside (disparity between haves and have nots) is growing at an exponential rate as our efficiency (some mistake that for productivity) grows.

If we can somehow have people set goals for themselves, and then if they achieve them they are entitled (i.e. have produced enough stored up value as a result) to take the rest of their lives off, we'll have a more stable result. You don't get that result with a 2% to 4% leak in their bucket.

The money changers produce "nothing of value". Yet they keep accumulating money through "fair" trading advantages. We need some automatic feedback mechanism that makes this undersirable to them. I wonder what it is?

Sat, 08/08/2015 - 12:23 | 6404822 theTribster
theTribster's picture

Death

Sat, 08/08/2015 - 13:14 | 6404935 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

To your last question, each time the money changers skim vig we kick them in the nuts, should work.

Sun, 08/09/2015 - 04:37 | 6406456 crashguru
crashguru's picture

The current framework is the Fiat Money system, where money is only being created when someone is taking on more or new debt. New debtors love inflation and existing debtors love inflation, because at 4% inflation, 2% income growth and 3% interest on the loan, the cost of debt is nil.

Productivity growth literally means constantly replacing labour with capital. Which per se is desirable, If it would benefit the entire society and not just the owners of capital. Since "wealth"  in this credit based money system is the mirror image of debt, particularly Public debt,  everybody should benefit. 

Yes, I agree, the framework must be replaced but that will require the replacement of the ruling elitists with We The People. Now, that is going to be a tricky one ...

Sat, 08/08/2015 - 12:08 | 6404782 RagnarDanneskjold
RagnarDanneskjold's picture
Nominal GDP in China's rust belt is falling. A lot of that is related to the drop in commodity prices, but China is also responsible for the drop in commodity prices. The risk of a global economic decline is definiely rising. China Northeast in Recession, Unadjusted Nominal GDP Declines; Global Economy on Knife's Edge

In July, Chinese Auto Imports Implode

Sat, 08/08/2015 - 12:09 | 6404785 Ignatius
Ignatius's picture

My last name is difficult enough, but if it were "Schork," I'd change it.

Sat, 08/08/2015 - 12:12 | 6404797 autofixer
autofixer's picture

Then he would have to remove the Stork as his logo.  

Sat, 08/08/2015 - 13:07 | 6404946 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

he could do some vowel switching, an "a" for an "o", then he could have a cooler logo.

Sat, 08/08/2015 - 12:15 | 6404802 Ajax_USB_Port_R...
Ajax_USB_Port_Repair_Service_'s picture

Lower oil prices will allow state, federal, and local governments to raise gas and diesel fuel taxes!  Whoopie!

Sat, 08/08/2015 - 12:17 | 6404805 oklaboy
oklaboy's picture

not to mention the gubmint is pocketing any leftovers in OBozocare, increased taxes,and onerious regulations

Sat, 08/08/2015 - 12:24 | 6404824 NESD
NESD's picture

Low oil prices are mostly due to the combination of too much capital thrown into the space and a technology leap (horizontal drilling & cracking). So supply has temporarily gotten ahead of supply. This will not be the case forever and will not not cause the world as we know it to end. While demand growth has slowed I see little evidence it has significantly declined worldwide. Markets fluctuate. They are supposed to.

Sat, 08/08/2015 - 12:36 | 6404842 jamochavez
jamochavez's picture

What about all other commodities. They are all down. Nobody is saying the world is gonna end. But a severe recession or depression is possible. Deflation will be bad for most because most do not have a net positive net worth- or cash or liquidity when credit tightens

Sat, 08/08/2015 - 13:35 | 6405046 Village-idiot
Village-idiot's picture

You can add to your list all those who are owed money.

Those who have cash in bank accounts, bonds, preferred shares, etc. are unlikely to get their money back in a deflationary depression.

Sat, 08/08/2015 - 12:47 | 6404884 SmedleyButlersGhost
SmedleyButlersGhost's picture

if you take this info and put it into context with other info - like 93m not in the work force, members of work force that don't produce any real value etc - I am going to go with that yellow thing at the bottom of the cage is a dead canary. If I'm wrong, not much of a penalty.

Sat, 08/08/2015 - 12:33 | 6404845 Cycle
Cycle's picture

The energy sector seems to follow predictable commodity cycle as shown here.

Sat, 08/08/2015 - 13:12 | 6404966 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

Clicked your link and it says the page doesn't exist, and coinidentally there is a guys picture on there that could be

your avatars twin brother, no kidding, check it out.  And while you're there fix the page, because I was interested in looking at it.

Sat, 08/08/2015 - 13:52 | 6405089 Cycle
Cycle's picture

The page is correct, it is blogspot having a hiccup. Inquiring minds can hit home.

Sun, 08/09/2015 - 12:24 | 6406989 jmcwala
jmcwala's picture

Tried it. "Sorry, the page you were looking for in this blog does not exist."

Sat, 08/08/2015 - 12:34 | 6404852 pocomotion
pocomotion's picture

I am just SHOCKED, really SHOCKED, that we've not responded to all the quantitative easing our treasury and Federal Reservists have done.  Shocked, I tell you...  We need more Cow Bell!

Sat, 08/08/2015 - 12:40 | 6404867 kchrisc
kchrisc's picture

"Stephen Schork: The Commodity Crash Is "A Canary In The Coal Mine For The Global Economy"

Actually, it is that there are piranha in the water--Zion and their grifting banksters.

Liberty is a demand. Tyranny is submission..

Sat, 08/08/2015 - 12:43 | 6404872 holdbuysell
holdbuysell's picture

"economissed"

That's awesome, Tylers. You should trademark that. It ranks up there with "QEfinity", another Tyler creation, I believe.

Sat, 08/08/2015 - 12:59 | 6404899 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

If you rip me off of all the disposable income I should have received over the last 40 years, and you appropriate my home, my garage, and my land, you can bet your sweet bippy that you are going to have a problem, Wall Street, you motherfuckers. I am the entity that wiped you off the face of the Planet Earth, you predator sociopaths. I reverse engineered your fraud that you have been committing over my lifetime and tipped the balance in my favour so that the Corporatists of the World could get a taste of their own medicine they have been doling out so generously over the centuries. Lastly, the Bible exhorts that I should fill your cup to overflowing, and give you a cup, or measure, of what you have meted out to myself, and millions of others. Taken together, I would seriously consider the probability that I have the World by the balls, my boot is resting firmly on your collective necks, and there is no possible way that you can escape the fate you have collectively built for yourselves.

 

NOTE: If you rip me off in any way you will wish that God himself would place a millstone about your collective necks and drop you in the Pacific Ocean to escape the fate I have engineered for you all.

 

p.s. PAY up, de Rothschild Bank, you owe me $30 trillion in physical gold bullion, payable immediately upon receipt of this comment.

Sat, 08/08/2015 - 13:24 | 6405004 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

Respectfully, it seems kinda like pullin' your pud if you're just gonna pay youself some gold, MASTER.

Sat, 08/08/2015 - 13:52 | 6405094 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

If I control the entire World with the assets that are rightfully mine that the de Rothschild Bank appropriated, I will re-distribute all of that money back to you, your family, and your friends, and neighbours. If I allow de Rothschild Bank to appropriate it, I ain't worth my salt, frankly.

 

Nepotism, and despotism, have ripped us all off too much. Someone has to stand up to the entire global Oligopoly, and I'm just the guy to do it, believe me. I'll gut the motherfuckers back to medieval times and they will not be able to withstand my unrelenting assault on their fraudulent ways. In brief, I swear that they don't stand a chance whatsoever to counter my skill, and precision.

 

 

Sat, 08/08/2015 - 13:04 | 6404934 pcrs
pcrs's picture

Yellen and Draghi are not buying commodities

Sat, 08/08/2015 - 13:06 | 6404940 Temerity Trader
Temerity Trader's picture

These writers post articles and use faulty logic to “prove” their point. If I save $100 on gas and then they raise my insurance premium by $100, it is a loss for the oil industry and a gain for the insurance and healthcare industry. The insurance company profits go up and companies like Intuitive Surgical profits likely go up too. So, it is just lose-win, not lose-lose. It is also deflationary and inflationary, so they offset.

Then these guys bring up CAT over and over, but neglect to prove it is a global downturn and not just CAT getting their butts kicked by Komatsu, and other competitors.

Is everything slowing down? I believe so, and the bankers will be forced to do QE infinity to stop it.  There is no way back now and demand was pushed forward, delay and pray. No escape velocity ever and more immigrants only means more pain, not new customers for the bankers and oligarchs.

 

We are toast; they have that much right. In this environment the MIC will push us toward war.

Sat, 08/08/2015 - 13:21 | 6404987 JD59
JD59's picture

According to Gerald Celente he has predicted a market crash before year end. He also stated that the commondity crash, is showing no global demand.

http://kingworldnews.com/gerald-celente-just-predicted-a-global-stock-ma...

 

 

Sat, 08/08/2015 - 13:43 | 6405071 CHC
CHC's picture

"...something is not right in the global economy."

 

Brilliant - just fucking brilliant!

Sat, 08/08/2015 - 13:44 | 6405074 ivana
ivana's picture

They dont give a sh... that all industries are going to collapse. Cause "the majors " will stay alive and be bailed out for 0%.

"The majors" who are sitting together with them on donation dinners etc.

All other players in commodity industry and related services can just die ... it doesnot matter.

That's how central planners see "demand & supply" & market laws in 21st century

Sat, 08/08/2015 - 14:11 | 6405159 WSP
WSP's picture

Prices of everything are rigged so exactly what does falling commodity prices mean?  Nothing other than that the global bankers need to restock their supplies before the next leg of inflation.   In short, whilt it is impossible to know the direction of prices in the short term, we do know that they are determined by the bankers for the sole purpose of increasing their control and dominion over humanity.   Trying to analyze why prices rise or fall is a fools game---there are no free markets and prices are all fixed by the bankers.  What more do you need to know?

Sat, 08/08/2015 - 14:20 | 6405186 MD
MD's picture

The first sentence in this post - I haven't seen a run-on sentence like that since the opening line of "A Tale of Two Cities."

Sat, 08/08/2015 - 14:22 | 6405188 TuPhat
TuPhat's picture

Schork is a dork that doesn't like the current gov plan for the economy.  He wants a different plan that will help him get richer.  Anyone who lumps Energy and Steel in the same basket is an idiot.  Lower energy prices will eventually benefit those that use energy (everyone ).  Lower commodities in general is a symptom of an economy trying to correct itself but the rich and their cronies like Schork don't want it to correct and then improve.  They want the status quo where they keep getting richer

Sat, 08/08/2015 - 14:52 | 6405261 franzpick
franzpick's picture

My screens say commodity prices are headed into the twilight zone, XLB materials for example down 33% from 45 to temporary support at 30, then down 55% to the 2001-3 and 2008-9 15 year lows at 20:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=xlb&insttype=&freq=2&show=&time=20

Then there's crude, now breaking its 17 year uptrend from 1998's $12/bbl to the current $43, headed to intermediate stops at $32 and then 20, down 25% and 50%. Click the monthly chart to see the depth of the upcoming drill-down:

http://www.investing.com/commodities/crude-oil-advanced-chart

Sat, 08/08/2015 - 15:40 | 6405371 Benjamin123
Benjamin123's picture

Schmuck: "Commody prices do not drive the economy, the economy drives commodity prices"

Any evidence? No? Just going to accept the statement at face value and go from there. Ok.

Sat, 08/08/2015 - 16:07 | 6405418 Wahooo
Wahooo's picture

There's an easy way to test that. If low commodity prices drive the economy, the the users of commodities, eg chemical companies like Dow, should see rising stock prices (I discount the refiners because of their seasonality). If their stock prices are not rising then one should look deeper into their businesses to see if production is rising or falling. I guess I just came up with a weekend project.

Sun, 08/09/2015 - 03:59 | 6406447 hendrik1730
hendrik1730's picture

Evidence?? What about demand and supply? Or common sense?? If there's 200 of "something" on offer and the market demand is 150, I don't expect prices to go up. And the demand is so low because all western states are now busy implementing a neo-communist system of big government, big rules and big taxes while the apparatchiks are getting richer every day ( read : the politicians and the bankers - 2 groups producing nothing but bullshit but leaching on the work of others ).

Want a change ? GET OUT OF THE BANKING SYSTEM while you can, transform your assets in something that keeps its value ( cannot be printed or cannot be easily confisquated ). The only way countries nowadays can "grow out" of their debt burden is through inflation - and it will come. C' est dans la nature des choses.

Sat, 08/08/2015 - 15:43 | 6405380 idontcare
idontcare's picture

Barron's this week:  Commodities: Time to Buy

Sat, 08/08/2015 - 16:18 | 6405443 Wahooo
Wahooo's picture

Of course!

Sat, 08/08/2015 - 15:57 | 6405400 Youri Carma
Youri Carma's picture

There have been a lot of people, also from the alternative financial media, who have invested in higher oil prices to soon and are talking their book.

What Stephen Schork says is completely realistic: "I do think oil prices are headed below $40 a barrel in the latter half of this year." but a lot of investors don't like to hear that.

Sat, 08/08/2015 - 16:06 | 6405411 Lynn Trainor
Lynn Trainor's picture

If oil prices are down so low, why am I still paying $3.00 for a gallon of unleaded at my local Chevron in Arizona?

Sat, 08/08/2015 - 16:12 | 6405434 Youri Carma
Youri Carma's picture

Of course these are Crude Oil prices which means on top of that there are costs for refining the oil on a certain location, to which the crude has to be transported first after which it has to be moved from that location to the consumer. And that can make a huge difference in Gasoline prices across the States. See:

Why fracking boom isn’t driving down Seattle gas prices http://seattletimes.com/html/businesstechnology/2024377098_gaspricesxml.html

Cheap Oil Jamming Rails Means Higher U.S. Power Bills http://www.bloomberg.com/news/print/2014-12-17/cheap-oil-jamming-rails-means-higher-u-s-power-bills.html

All thanks to our ol friendly ice eating friend Buffet http://forum.prisonplanet.com/index.php?topic=266408.0

Sun, 08/09/2015 - 15:35 | 6407409 uhb
uhb's picture

This Schork guy is right, but even i figured that out... thats why, by the way, copper has its phd

Tue, 08/11/2015 - 02:01 | 6412870 stocksystm
stocksystm's picture

Low oil prices are a positive for the worldwide economy.  Technological advances in drilling have been part of the reason we have a surplus of fossil fuels.  Anytime you can provide something that is vital to the workings of the economy at a historically low price it is going to help the economy.  Of course, part of the reason the price is low is probably due to anemic economic growth (especially a slowing China).  But the lower price of this (oil) and other commodities is a net positive to future growth prospects.

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