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"Oil Won't Stop Until The Economy Breaks"
As gold strengthens on the back of the extreme experimentation of the world's (now-sheep-like) central bankers' easing and printing protocols, it does no real harm to the world, but as John Burbank (of Passport Capital) notes, the painful unintended consequence of all this liquidity is energy costs skyrocketing - and it won't stop until the economy breaks. The negative feedback loop, that we pointed to yesterday as potentially the only thing to stall a magnanimously academic response to the insolvency we see around the world (and the need for deleveraging at this end of the debt super-cycle), of oil prices into the real economy will be devastating not just for US but for EM economies, though as the bearded-Burbank reminds us - Saudi benefits greatly (and suggests ways to trade this perspective). Flat consumer incomes while costs are rising is never a good thing and while we make new highs in oil in terms of EURs and GBPs, he warns we may soon in USDs also. Summing up, his perspective is rising tensions in the Middle East combined with central bank liquidity provision are a huge concern: "We're actually quite bearish. The only reason all this liquidity is coming into the market is because things are really bad. It's not because things are good. It's hard to know where things are going to go. The point is, just because they're putting liquidity in the market doesn't mean the economy is improving."
Edited Transcript below:
On the price of oil and his Saudi investments:
"[Oil] is up 16%, more than any of the indices. It's a big problem for the rest of the world - central bank easing and liquidity providing presents a lot of problems for the average consumer here but also for emerging markets around the world.”
“The one market it really helps is the Saudi market. We have 15% of our capital in the Saudi market - only about 1% is held by foreigners. It should be opening up this year. So we think unfortunately QE3, which is now being pursued in Europe and Japan, essentially in the U.S. with other programs, has negative feedback loops. And oil we think is the one. Gold goes up 10%, 20%, 50%, it doesn't cause any problems with people the way banking is done these days, but oil does… I don't think oil is going to stop until the economy breaks which is a real risk."
"The average consumer isn’t doing well. Their income has been flat for almost ten years, but their costs keep rising. They had a benefit with natural gas being cheaper this year, but the oil price is now breaking out and it's breaking out because of all the liquidity in the world. The oil price is making new highs in euros and pounds and it may soon in dollars. That's a big problem."
On investing in Saudi:
"Right now, we have to use swaps. We've been in the market for about three years. Foreigners couldn't actually own Saudi stocks until August 2008. So we've spent quite a lot of time doing our research and understanding the market.”
"[Saudi Arabia] is very sincere in opening up the market to foreigners. It reminds me of India in the 2003, 2004 time period before you could buy Indian stocks directly. Saudi, which is 70% of the G.C.C, and by far the most important, the most liquid market, is something that foreigners are going to want to own.”
"Right now, you can't buy an ETF, you can't buy Saudi stock. It's obviously very difficult to buy a security directly. We have done that. We know that foreigners now are looking at the market. The market is about 11 times earnings with almost a 5% dividend yield in 2012, and that's on an unlevered basis. The Saudis have about $600 billion of reserves and corporates have very little debt. To me, there's a lot of systemic risk in the Western world…[but] in the Saudi market, they've been very restrictive. Banks have not wanted to make it easy to borrow money and buy stocks after the bubble that happened in 2005, 2006."
On tensions in the Middle East:
"If tensions with Iran means oil goes up, then that's good for the Saudi economy but not good for the rest of the world. Fundamentally, if there's a problem with Iran, it's a problem for the whole world…The biggest risk for Saudi is really a risk that the whole world bears, but actually Saudi benefits. Oil goes to $150, $200, it means the economy is going to grow even faster because the government has more money it can deploy in the economy."
"Saudi is not like an overbuilt economy. It's just opening up now. Building is going on. The Saudis are so conservative that they don't lend against land. "
On the European Central Bank issuing more money:
"A lot of the risk has been taken out of the market, on a near-term basis. We're actually quite bearish. The only reason all this liquidity is coming into the market is because things are really bad. It's not because things are good.”
"I don't believe in a global rally right now. It's a bounce back from oversold conditions last year. But I think the confidence in central banking is far overdone. It's hard to fight the Fed when prices are going in the other direction."
"It's hard to know where things are going to go. The point is, just because they're putting liquidity in the market doesn't mean the economy is improving."
On Passport's strategy:
"We’re stock pickers. In fact, this is a great year to be long and short individual securities. In 2008, everything went down. In 2009, everything went up. In 2010, everything moved together and eventually ended up. Last year, things started separating. Our strategy is to be picking individual securities, companies that are not depending on economic growth.”
“Biotech and healthcare is one of those sectors. There hasn't been an obesity drug approved in over 30 years and we thought Qnexa would have a good chance of being approved…We were one of I think four big holders in the stock. We think it can double again because we think a large pharma would probably like to own the company at some point."
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So you think there will be no coal, oil or gas at all? You think it's all going to suddenly disappear and there will be no energy at all?
I used potatoes because YOU used potatoes. Rice is much better; Asians have been living on it with somewhere between 6 and 12 people per acre fed for thousands of years. Obviously we are not going to only eat potatoes.
An ox is a bull with his testicles removed to make him grow bigger. There are Amish and Mennonites and Hutterites and Hesidic Jews etc etc all over the place that have all kinds of old breeds of animals and old tools.
Railroads are going to be the way of the future if energy levels decline anywhere inbetween flat to mad max levels. People all over the world haul stuff on dirt roads, and they've been doing it for thousands of years. Most farm roads in North America were only recently paved, if at all.
Really, it all depends on what kind of collapse you are expecting; it seems you think no one will ever use money ever again, and all the hydrocarbons are going to vanish, leaving only local barter economies = Mad Max.
This summer, my Massey-Harris is getting one of these:
http://www.youtube.com/watch?v=AksUuOckWpI
Interesting technology.
Worked all over Europe during WWII, should work better now.
I'm going into the starter business!!!
I come here to read and learn finances and geopolitics.
I abstain from commenting what I do not know nor understsand very well. Look and learn, as I was taught in the Coast Guard.
As a group, almost everybody here is unqualified to speak about agriculture/natural resources development & management. What we get are 'theoretical experts' like the Spaghnum Moss. Enjoy this video of actual oxen bred with short legs to successfully plow in steep slopes. An acre of bananas will provide as many calories as an acre of intensively farmed potatoes. Nature balances out.
http://www.youtube.com/watch?v=YYnDXXA4icw
Actaully there are a few here that know their shit vis a vis agri-production from first hand experience... Sean7k and LawsofPhysics come to mind.... (apologies to any regulars that I overlooked)
Yes, one should always assume that someone knows more than you on a given subject and one should stick to what one can reasonably converse in....
"As a group, almost everybody here is unqualified to speak about agriculture/natural resources development & management"
that's because the questions and solutions are both broader and intensely more local than that description. The answers going forward are more about "gardening" than "farming," more about an intimate knowledge of local systems and plants than massive production management, more about imitating nature than spending endless energy attempting (unsuccessfully) to convert a local ecological system into something it is not and while doing so, making permanent destruction on water supplies, soil, and soil organisms. At least, that's what "the experts" are saying. Ironically, with that description, my neighbor, and her tomato plants, become a vital resource.
Since I consider you a good contributor to this forum I will have King Solomon enlighten you:
Where there are no oxen, the manger is empty,
but from the strength of an ox come abundant harvests.
(Proverbs 14:4)
This is about farming indeed--and all it required peripheral skills: tool sharpening, body mechanics, astronomy, basic carpentry/metalworking, animal husbandry, compost making, seed preservation, etc.
Gardening is a first step and even so, most people want to learn all about it in one hour or less. Our small green group is about education and people do NOT want to learn, no they don't. What they want is to somehow calm their consciences. Like the "buy local meme" someone posted earlier in this thread. It's the same meme..."If I go to a one hour workshop I'm green and doing what I should do."
Most will starve, passing out while sitting on their chairs and sofas.
my favorite Solomon line goes something like:
If you see oppression of the poor, and justice and righteousness trampled in a country, do not be astoundedI hear you. It's probably true that my definition of gardening is more about scale than detail and complexity just like my plugs about permaculture. As I said somewhere above and many times, I'm with you, I don't expect everyone to catch on. They'll catch plenty of other things but not this. Those who do must learn fast and share with those who will learn.
Why you've just described the world outside my hut! 55 million on land the size of Texas, ox carts carrying the produce on dirt roads from farms plowed by oxen pulling a wood and metal contraption, (dodging cobras and Russell's vipers and Banded Kraits the whole time) most all grown without pesticides and petroleum based fertilizers (can't afford them)...and everything ending up in twice-daily sidewalk markets crowded with shoppers many of whom lack power much less refrigerators. Meat's got a lot of flies on it, but that's why we cook it....well. Truth be told, the meat section of the markets stink like hell come closing time. Lots of mouth breathing required, and a dab of perfume under the nose spares one the worst of it. Sometimes they walk the animals to market, and slaughter on the spot. That's fresh, thought not for the squeamish.
Three growing seasons per year and lots of rain no doubt help, but Mad Max is nowhere in sight.
An acre of bananas will also leave you dead from constipation. :)
LFMayor - you make all good points, except the first one about agreeing w/ CIO. Yes, the urban/suburban-ites are in a pickle, but nuking sombody, like {crazy} CIO advocates, is no solution ... is it?
"It is impossible to develop any other system of agriculture than the one we have now, or the one we had before now."
So sayth the prophets of the cult of Death.
What the hell does the NWO have to do with Peak Oil?
'That means pre-emptive use of military force against the major population centers of China.'
Wow! That's a new one. One place at a time Captain America.
Not all 7 billion consume oil you are aware?
You'll be very hard pressed to find people on Earth who do not eat food transported to them.
China is the right place to start.
The US consumes 23% of annual total global oil consumption with 4% of global population. You either want that 4% to endure the devastation of taking that 23% down to 4%, or you are an American and want to have a lifestyle superior to the rest of the world.
There is only one way to do that.
Wow.
You, sir, are a retarded person.
[junk]
The one percent speaks in tongues through the fellow with the microcephalic knob on his neck. Ladies and gentlemen. You thought it was a monkey, you thought it might be the wild bearded boy found in the jungle, but no, our circus just has "crash" the pscyopath lusting for the end of civilzation anywhere it isn't. Crash knows no connection exists to the rest of humanity for it. Free Tickets and come if you dare! Remember, it wants to kill 25% of you!
microcephalic knob on his neck.
LOL. I'm going to hang that on my fridge.
25% won't be enough. Mankind went from 1 billion in 1900 to 7 billion today -- because of oil.
Please stop.
Oil? I thought it was K-Y, but hey...
Crash, I get your line of reasoning, but have you considered that--like Col. Kurtz--your methods may be "unsound?"
yeah doc, unsound :) But you're not hungry yet.
Colonel Kurtz says that the US won't have to attack China to depopulate the planet. The coming economic collapse/WWIII will do that for you. Beans, bullets, and band-aids my friends...
2 major wars and a few smaller wars, not to mention several genocides in there as well.
Does that seem feasible to you? An increase in the size of a herd seven times over during a period of only 100 years?
They fucked and had kids before 1900 too, you know. Lots of kids.
Clue: The 7 billion number is probably NWO propaganda garbage to keep the ponzi going.
i had a Jehovah's witness tell me once that there were only 4 million people in the whole world. Nutrition, pre natal care and pharma keep keep more kids alive these days.
Darwin has been twarted for so long it's now dangerous to stop twarting him. From everthing from warning labels on plastic bags for the sub 80 IQ's to entire countries that cannot feed themselves.
Crash could present his case better and with more sensitivity.
However, be open to concepts that intially seem harsh, wrong or unsettling.
Learning should happen anywhere and everywhere.
There are many unfortunate choices and realities on the horizon - that from an über optimist.
Yes, let's all be open to mass murder.
You nominating yourself to be the first victim?
Because God knows there is no way Americans will follow the laws of economics and reduce their consumption as things become more and more expensive.
If there was a price on air, would you reduce your consumption?
If ifs and buts were beer and nuts, you wouldn't want to destroy the world.
Oil is analogous to food, not air. But you don't want to accept that, because then there might be an argument against murdering the world.
Contrary to popular myth, it's not like Americans eat 10 times as much as everyone else. Everyone needs 1500 to 3000 calories per day, unless you're Michael Phelps and you are consuming 10,000+ calories per day in order to train constantly to be the best swimmer in the world, at the cost of accelerated aging.
Yes, North Americans eat more meat and more imported fresh food from tropical regions than other people, and sure that will likely change. However, from a calorie perspective, in an uber-expensive oil world, more people will need more calories to live and perform manual labour, not less.
This is ZH. This is not CNBC. I seek no advertising revenue or clients by telling them rainbow and unicorn stories and phrasing things gently. ZH is where you find bullshit, and stupidity, but you can also find information here.
I don't care if people listen or agree. And it doesn't matter if the listen or agree, and it also doesn't matter if I care about them doing so.
Geology doesn't care about anything. That is all that matters.
Normalcy bias unto death.
Because oil is the only source of energy in the universe.
America needs to rebuild itself from a suburban country to one that is more agrarian. And by needs I mean that it must do it before it is forced to, because if America waits until it has to change there will be a lot of turmoil.
There is going to be a lot of turmoil.
you got that right. If the choices are to either preemptively "wise up," or risk complete disaster, we choose Door No. 2 every time, all day long.
Handguns, lots of ammo, rice, beans, water source, god knows what else. . .
So you want to take existing, productive farmland and redistribute it into smaller, less efficient farms ran by former suburbanites? Or build large housing tenements next to existing farms, so the former suburbanites can be used as labour on the farms? Or make all the workers owners of new farm collectives?
Personally, I'd rather apply feebates on fuel so that farmers and transporters get steep discounts, while non-essential users pay a higher rate for fuel, and luxury users - airlines, cruise ships, etc - pay hefty premiums. let the 2 percent that already grow all the food just keep doing what their already doing.
Numbers are a bit old, but at 400 gallons of oil equivelent per year per person for food production, at 400 million people, it would take 4 million barrels per day of oil to just keep producing food using existing methods. This includes nat gas use for making ammonia fertilizer, transportation, etc. renewable or nuclear could be used to make the ammonia, saving nearly a third of that.
EDIT: oops, that is not right, its 4 million gallons per day, forgot to divide for barrels; more like 100,000 bpd needed to feed all of America using existing methods with no change at all.
REEDIT: man i can't do math today. 400 gallons is ~10 barrels per person. 400 million people makes it 4 billion barrels per year, divided by 365 days is around 10 million barrels per day. Man I hope that 400 gallons number is way too high ...
Keep in mind, a food portion eaten today is typically transported 1,500 miles from producer to consumer. Plastic packaging also contributes significantly to food-related oil use. These factors help explain the oil-intensive nature of the current food system portrayed by your numbers. Excise taxes on luxury users of oil come nowhere near to covering your proposed feebates for agricultural users. If the economy breaks, developing small. local, self-sufficent agricultural systems will be the only way to create food security for most people. I don't desire a transition to an antiquated agrarian society, but we may be in the process of being forced to go there whether we like it or not.
Typical death worship by a peak oiler.
Get those obsidian daggers ready, we're going to make the sun rise, 10,000 still beating hearts at a time.
Bloodlust, pure and simple.
You and utopians are the death worshippers because if we do not confront peak oil head on then there will be problems. If you were in charge you would be saying everything is fine and then if something bad did happen what then? You would be unprepared. You are the death worshipper.
POTUSes like Clinton, Bush, and Obama have stayed silent on Peak Oil, because they run your death cult. You are as much a part of Scull and Bones as they are. You embody the cult of death.
You are saying you want to perpetrate a massacre of the kind not seen since the days of Ghengis Khan rather than do a little fucking research.
You worship death. Get the fuck over it.
Oil in real terms is simply not going up. Oil is only going up because of money printing: http://www.tfmetalsreport.com/sites/default/files/users/u1246/oilpricing...
But you want to murder a few billion people, just to be safe.
Bravo!
How much is the cost of extracting oil now, versus in 2000? How much of the price rise thru 2008 was speculation, and how much was inflation? Has labour and equipment costs increased 400 percent in three years for oil producers?
What if gold was undervalued before, thru the 2000s, so it was buying far less oil than it should have, and it is less undervalued now, so the price of oil in gold has gone down, but not entirely due to inflation?
tm - I just watched Jeff Rubin say that for every American that decides to get off the road, 10 more in the developing world get on. My own observations support this statement. In the past, rising price always brought on more production until we reached about 86mb/d. Now, as supply gets tight, prices are bid up until one or more economy throws a rod. Their demand collapses, supply frees up, prices come back down somewhat. This is what bouncing along the Peak [cheap] Oil plateau looks like. Sure the market is gamed, as are all markets now, but there are fundimentals having to do with no supply growth and growing EM demand.
Oil is only going up because of money
Now what's this about 'mass murder'?? Do you mean the CIO preemptive mass murder? Yes, that is insane, but has nothing to do with Peak Oil.
Yes, the globalists feel safer that way.
peak oilers vs utopians - Was that a Survivor episode?
Hockey teams perhaps?
Utopians had to change their name after pressure from Indian tribes. Peak oilers still in Edmonton, but thinking of selling team to China.
Bullshit. You faux conservatives refuse to acknowledge the math of what MUST happen.
________________________________________________
Ah, US citizen math running crowd.
Figures do not lie.
To solve an overconsumption, nothing more efficient than eliminating the non consumers and the low consumers.
US citizen night train.
Made me laugh.
The impossibility to self indict in US citizenism leads to the weirdest result.
Great, lets consume resources to eliminate non consumers. Their elimination will free up resources.
The culture of death pertaining to US citizenism is baffling.
The US is not the solution, the US is the problem.
Wow, you got junked 6x (and counting).
You are perfectly correct.
Nuclear war with China is inevitable. The earth cannot support 7 billion people living the life of an average American. The following overpopulated countries will have to be destroyed so that the American people can continue driving their SUVs to work:
China
India
Bangladesh
Indonesia
Pakistan
Nigeria
Ok, maybe not Nigeria because they're still producing oil. We will have to sterilize most of the population in Nigeria as well as most of Sub-Sahara Africa and Brazil and southest Asia.
Sure, because it is impossible for Americans to move closer to their workplaces or to get smaller vehicles.
Fuck it, let's just end the problem once and for all and just all kill ourselves. Come on, we'll do it on the count of three. One...Two...Thre-
Somewhere, there exists a University that owes you your money back...
Is the concept of "not committing mass murder" somehow connected to a lack of education?
Or are you just jumping up to defend your religion's attempt to perpetrate the greatest mass murder the world has ever known?
Just say no to mass murder.
Why would anyone want to live like Americans? I'm an American and I certainly don't. Folks waste so much money and effort on pure crap. Nuclear war isn't going to make the situation any better.
Crockett - I agree, of course, shilling for nuclear preemptive strikes is like a Dr. Evil caricature.
And yes, there are alternative world views that Americans could learn from.
Meanwhile; in the "real world" Bill gates wants to prevent childhood malaria in Africa with vaccinations; thereby "saving" 500,000 aftricans a year. Which if the UN keeps feeding them; which they will, will reproduce. So, for Bill Gates to feel good about himself the world will have to deal with millions of useless excess Africans. In addition to the millions of excess Africans who are already "in charge" of Africa. My God. Where does the irrationality stop.
Bill Gates can do what he wants to do. If those Africans he saves don't produce, then they will have no claim on the products of the world market beyond that which is given to them. If things get so bad that people in the developed world are starving, then they won't be given ANYTHING. The worst they can do is die or be self sufficient. More likely, they will produce more than they consume, and provide goods or material for the rest of the world.
But then, you are likely just another death worshipper who wants more sacrifices for his evil god.
I accept bets:
SPR release within 4 weeks.
As per Peterson Institute, USA has 300 millions barrels above the minimum storage enforced by congress and does not require permission from congress for this 300 million barrels.
I bet 4 weeks? Any other bets?
http://www.piie.com/publications/pb/pb12-6.pdf
Too lazy to check but last time obummer released reserves, didn't gasoline price actually go up?
I know. No it didn't. It actually make crude price drop from 99 to 77 in 3 weeks or so.
Crude did drop sharply last year about the time of SPR release. There is no evidence of causation, though, because the global economy was smashed in that time frame, reducing consumption.
I agree it's all interpretation. My bet is that it did. I'm short oil.
I'm short with ya...... Did well last year short oil. Just got on again last couple of days. Good luck
Good for you.
Me too. there's evidence that the majors, (the seven sisters, whatever), are selling the tops of the rallys. The Long Speculators are going to wake up soon and find out they aren't going to make any money; then crasho, blamo. Peak Oil? Check back with reality in ten years.
It's not about trading. It's far larger than that.
But you'll be proven right. It's a downward sloping sawtooth for civilization. The uptick in a single sawtooth is in progress and when the economy is smashed, down will go the price. But just a little bit until the next attempt to grow the economy, when it will be smashed again.
Oil is everything. Oil is getting scarce.
Totally disagree. Cheap oil is getting scarce. But there is plenty of oil.
Unless you believe the idiotic fossil fuel theory where dinozaurs lived at 30000 ft deep into the earth.
Oil comes from earth's core as BP's accident amply proved. It's just risky and not cheap any longer.
I have considered this theory that oil is abiotic and I think there is some confirmation in that Saturn's moons have a boatload of methane and there ain't no ancient life there.
Methane is not petroleum Ned.
It's silly to focus on oil. There's plenty of solar energy, too.
Just a few light-minutes away is a fusion reactor a million times bigger than the entire Earf.
THERE IS NO SUCH THING AS TECHNOLOGY MAKE YOUR TIME.
@EKM - Can you cite the "ample proof"?
BP's accident at the bottom of the ocean?
http://cleantechnica.com/2010/04/16/whod-laughing-now-scientists-make-crude-oil-from-pig-manure/
The key here is heat , organic matter , pressure, and time, you get all these factors with the movement of the earth’s crust and this is a constant process that has been going on for millions of years there by the constant creation of oil in the earth.
http://2012forum.com/forum/viewtopic.php?f=58&t=22059
BPs accident that they couldn't hold down the pressure coming from earth's crust, made it for me. Any organic matter would do the work.
"oil is getting scarce", and we know this how? Because you said so. Oh, okay.
Also, how about betting on at least 3 increases on crude margins by CME within 2 weeks?
I'll bet on one increase in five weeks; which will crush the market.
Obama is just stupid enough to take a strategic reserve and waste it pissing into the wind. the SPR has ~750 million barrels. Ata a rate of 8 million US daily consumption would exhaust in ~ 90 Days.
It will have negligible impact on a daily 17 million barrel market.
The SPR release will only crash the price. Then all others that have hoarded and speculated will run away simultaneously and will do the job.
That gets you like 1/3 of the campaign trail..not even enough for election day.
It would exhaust in 90 days if all other sources stopped. Hard to believe that happening.
True to a point LB, ...IF ALL OTHER SOURCES STOPPED is the functional phrase there, but the use of the SPR need not replace all oil imports to bring down the cost, oil is very sensitive to supply (apparently more then we thought) a small movement either way in supply can bring about a large movement in price. So, supplementing imports with about ten percent of the daily importation from the SPR could well trigger a major drop in crude on the NYMEX, it would unfortunately be temporary I believe, and no matter how much SPR oil is pumped into the distribution channels it does not overcome other more serious structural problems like the over concentration of refining capacity in the east Texas/Louisiana area which in turn are coupled to overburdened pipeline and storage facilities. That is a major reason why we had such a huge drop in gasoline prices in the last few months, they really overestimated the demand for summer blend gasoline last year so they were badly short of storage, and had to essentially "dump" it on the market to accommodate the last runs of winter blend this year before the switch over to the 2012 summer blending again. That is why gas prices have been volatile though till this week oil has been stable and range bound.
This is why the US and the whole western world deem the steady uninterrupted flow of crude to be in the interest of national security, there have been three disruptions pretty much simultaneously, Islamic terror and unrest in Nigeria, the Arab Spring in Libya, and the imposition of greater sanctions on Iran which has not yet even impacted oil flows. All together they make a small dent in global supply, but imagine if there were an attack on a shipping point like Ras Tanura, or a closure of Hormuz? Gas would be rationed and still cost $10, the economy would make like the clutch of a '84 Alpha Romeo and explode into bits and die.
I do not advocate the use of the SPR for strictly economic purposes, that oil will be the ONLY thing that saves us should the MENA really blow up, and over a longer horizon it will someday if not any day. Economically speaking there are no alternatives to oil now, but they better start to shag their asses and find a better way soon because the clock is ticking and when the MENA does go tits up there will be no economical way to get that energy back on line. If the US economy hits the skids ala 1930 the world economy will tank like never before, the difference is that there were 2 billion people on spaceship Earth in 1930, there are 7 billion plus now. The death and misery will be like nothing man can even imagine, like all diseases ever over our history condensed into a few months of starvation.
EinS - I'm seeing different numbers.
US daily consumption is about 20mb/d and I think your SPR number is wrong to. Maybe your number is capacity, but I think the SPR is supposed to be holding 630mb/d, which ... doing the math comes to about one month's worth of consumption is reserved.
https://www.cia.gov/library/publications/the-world-factbook/rankorder/21...
Liquidity trap or debt deflation?
http://strikelawyer.wordpress.com/2012/02/22/liquidity-trap-explained/
Energy prices are an "exogenous" event, or are they?
The Sexy reporter is getting FAT!
More cushion!
lol
very perceptive, a sign of not giving a shit anymore
I am seeing a local surge in trailers for bicycles.
Homemade even.
Its a booming cottage industry.
Then it hit me. This is how the "third world" does things.
They used to say that 3rd world people wanted "3 rounds": bicycle, watch, and radio. Now we will need rounds of gold or silver to buy same.
No rounds of ammo?
the ones that stockpiled that are the ones riding in the cart, getting pedaled
You're right, I forgot.
Hope & Change brother. Some dumb muther****ers voted for this and some of them post here. Sheeple controlled by TV.
you really think it matters who you vote for? wake up man.
bankonzhongguo
I am seeing a local surge in 12ga and 9mm fire arms ..Then it hit me " this is how Mad Max did things "
Bullet-proof Mo-Ped!
Gmad LOL.
plus 1
But CNBC is telling me the economy is roaring back.
yes but they didn't finish the sentence - "the economy is roaring back...to the dark ages."
Time for the Chinese to go back to riding bikes.
But we mericans can keep riding our supersized SUVs?
Only if you paid for it with a Credit Card. People who pay for things in cash are un-American
yes, until all we can do is sleep in them. They will sleep a family of 3.56 people.
Sure, as long as the family doesn't mind pushing.
If you can afford it, at any price.
Amazing. They wouldn't let this interview on CNBC. CNBC is the biggest bunch of pumpers and scumbags on the planet. CNBC is a fraud and a scam.
Or maybe they just didn't book him yet?
CNBC has a responsibiity to serve its customers.
Their customers are their advertisers. Not their viewers.
They serve their customers by encouraging the purchase of their customers' products, and that happens by making people happy and willing to buy.
Depressed people won't buy customer products, so the customers inform CNBC that they will not be purchasing any more advertising if CNBC makes the public unhappy.
Well formulated
I heard it said similarly once.
Television sells it's product to make money. The sheeple believe that the "product" is advertising and that the viewers are the customers, when in fact, their "product" is the viewers, and they are sold to the real customers, the advertisers.
Twisted. Like everything else now
Niesman and bartiromo depress me, oh and the "Fast money" guys, and the options monster clown.
Then do yourself a favor and turn the damn thing off. Niesman and bartiromo depress me ...
Upvote if you really, really, want this to happen on Bernanke's watch.
The premise that you "really, really want this to happen" is a bit dark. When the SHTF, you won't care so much about who to blame or that we were all "right" about Bernanke.
Well, we know it will happen, so I'm taking a more pragmatic approach--let's get this shit started.
I bet you could have said the same thing about the will of the Icelandic people prior to the big FUCK YOU they gave the bankers, now look at them--laughing at the rest of the world's inability to take the fucking pain.
Fuck that. I want those assholes to pay.
Going to be a good time to pick up a 4-7mpg motorhome. When the price of fuel crashes because of no demand i'll park it down by the river. We are all going to be there soon enough.
She is sooo steamy
She's nice but I like Sara Eisen more.
The cycles are shortening, and they will continue to do so. Just like drug highs - will take more and more (printing) just to stay afloat (pun intended). Eventually, any number of things can set the tinder box into an uncontainable blaze.
I still think the criminals can milk this a bit longer, but I can't any road that leads past 2014.
Christmas
Take a look at Bill Gates’ purported wealth / income, how it must be spent, and compare the result to what Microsoft stole out of the B1 immigration gate. Are American universities the best in the world, or are they too stupid to provide Microsoft with programmers? Is Silicon Valley similarly too stupid to function without free labor, or are corporations too stupid to train talent on the fly? Is small business integral, or is South Africa the best we can expect?
So, the ignorant boss walks in and abruptly tells the university open source consultants that the consortium wants to replace people with numerical control, to build an information economy, exponentially expanding university in the process as an economic activity replacement for manufacturing. At that point, would you start flipping houses, or get ready for a world of numerically controlled people in automated societies, dependent upon black boxes shorted to the empire’s black hole?
The leisure seeking retirement base was already relatively large, and now it is accelerating through 10k/day. Given retiree spending habits, what did you expect to happen to unemployment, as measured by BLS, and the tax base, as measured by Fed? Do you really think intelligent kids wouldn’t see the outcome the minute the boss opened his mouth?
Don’t fight an empire. Employ its gravity against itself toward some useful purpose. The only thing lacking for final adjustment is the will, or lack, of the people affected. Do they want to take individual responsibility for liberty now, or do they want to go down the rat hole with the dc computer? Ask the pilots who have increasingly been hitting the drink.
Humanity owns nothing (0 + 0 =1 (I cannot always respond)). We lease our time on this earth, extending it with diversity and depleting it with replication. The proprietary model, in which Bank owns everything and regularly resells, maximizing notional value with inflation and deflating before confiscation, is a simple fusion machine, an extension of gravity through the addition of delay robot devices.
Europe ran out of room, given its relatively closed society and associated technology, and beget America, which has now run out of geography and technology accordingly. You could provide the majority with a complete set of plans for a fusion/fission reactor and they could not build it, because it is captive to the short-cut psychology. It relies upon its senses, which may only confirm the past, with impulse rationalization.
Liberty requires discipline, not he readily apparent hierarchical variety normally associated with military, but rather its implicit mirror, self-discipline aggregated. The point of explicit maneuvers is to demonstrate discipline in the face of the enemy, which turns out to be an external manifestation of internal limitation, fear. The majority projects itself around itself, in a self-confirming bias, and lives in fear of what it sees, paying its agents to protect it from itself, who dutifully keep it busy with make-work entertainment.
The problem in the USSR was not lack of work, but rather lack of incentive to do it. Individual sovereignty is not a grant from government. The individual grants government sovereignty over only that which is the common, first at the local level, and then up to the federal level, not the other way around. The population mirrors government when the process is shorted, when ignorance attacks the least among us, left unchecked.
You can buy food, shelter, & clothing, but not health, hearth, & honor. The latter must be fashioned from the environment, to the end of environment, in a circuit well beyond the empire’s outermost event horizon, in privacy, because the clock despises its need for diversity.
You don’t have to do anything to bring down an empire, but go unmeasured. Evolution is sneaky fast in that its ingredients develop beyond sight, and coalesce only upon recognition. You can program a baby factory, but you cannot buy real parents. Count all you like.
Children are the light that penetrates the darkness that is empire, and they know it, because they recognize the change in behavior when they enter a room of adults. The intelligent ones quickly learn to avoid the black holes of anxiety, then to enter and exit gracefully, and finally to make angle adjustments, increasing fluidity to release the pressure. The really intelligent learn to adjust adjacent and disparate relative to each other. Ask Gorbachev about the effect of light.
Each of us enters the event horizon chosen for us by the empire, in a lie of lies, at various ages. If we accept it as our home, the mind loses its elasticity from independent fulcrum action, and is directed by impulse action up the old evolutionary chain of command. Children lose independence as they mimic, to please or displease the crowd, becoming the increasingly double minded, say-one-thing-do-another, actor as they go, until one day they no longer have the necessary imagination to penetrate the looking glass.
The socially non-conforming, lawfully non-conforming are stuck in the purgatory of the empire’s teeth, and the empire is a shark of sharks, with many teeth, in many rows, one set constantly replacing another, driven by fear in the conforming. They see the looking glass ports, but cannot enter because they cannot catch the wave, due to the burden of a self-serving sense of fairness, seeking equal outcomes to the conforming. All become part of the shark.
It is for lack of individual responsibility, the excuse of equal outcomes, that we fail to see the Garden of Eden, not for lack of Law. It is equal opportunity, that which is unique, which ensures that we find the correct mate. You cannot choose your children, but intelligence recognizes intelligence, clearing its path, and intelligent children bring Christmas wherever they go.
Intelligent discretion is a gift. Allow it to flow through you and the garden will get what it needs, when it needs it, by path unknown. The point of a constitution is to eliminate the need to address fear with law. The process favors discipline and imagination under the empire law of diminishing returns. Christmas is not an act; it’s a place and time for spirit.
Discipline and imagination are like logic and emotion, order and disorder, father and mother, and separation of charge. You must have both to sail. In balance, they grow; in opposition, they collapse. The empire is just a mirror of mirrors creating the delay shift. It exists at your discretion.
Dude, what you say may be true, but I wager that you have paide a high price for thinking as you do.
Here's a thought. If you do what you did, you get what you got.
Praise be to Jerry!
about to pass 110 on WTI.
Brace for impact.
She's hot!
Correct, and thus why gold will rise more than oil. When faced with an overleveraged balance sheet, the Central Banks will use gold as the liquidity to maintain any semlence of stability. Silver will follow, and oil too, but gold will see the first spike.
She's hot, but she needs voice lessons (thin, reedy, nasal voice). Pretty smart, though.
You are on to something there. They will choose the lesser of two evils and let an increasing amount of the "hot money" pour into pms to take some of the heat off of oil. It will be like a fart in a windstorm, but these banksters/pols are going to get pretty desperate, pretty quick with the way crude oil/gasoline is going in an election year.
"Flat consumer incomes while costs are rising is never a good thing"
Really? No fucking shit Sherlock! Does it take a PHD to figure that one out?
but why is the conclusion of the PhD's to pump more liquidity into the market? Seems to me that the PhD's are either dumber than a box of rocks or intentionally accelerating the collapse. I believe the latter.
I declare $4 per gallon regular gasoline the official opening of PHD economist hunting season.
Happy hunting kids!
LOL! there will be more on the menu than economists, though.
ZH Dead pool:
3 from finance (buffet heart attack fapping to becky quick on squawk, biggs choking face down in his tapioca pudding, chuck prince from melanoma etc)
4 politicians (kissinger, daddy arbusto, carter, tom delay [cocaine] etc)
3 hollywood/media/pop (eastwood, lindsay lohan, beiber etc )
3 countries/political parties/governments ( greece, uk, syria, japan etc)
2 sports figures (magic johnson, tim tebow etc)
1 wildcard ( DSK, angela merkl spain etc )
email your team to zhdeadpool@yahoo
game starts march 1st, winner is team with most dead by election 2012.
consumer sentiment will soon start to rise in a balistic manner with higher oil and gas prices, its bullish and good for the economy since there is no inflation
Orson Wells is a money manager?
At least Orson had low time preference. He would sell no wine before it's time.
I think you might be a genius.
Breaking news : the economy is already broken.
Peak Oil - Check Mate
Peak oilers would have a lot more credibility if they could distinguish between the effect of falling oil production and the effect of excessive money printing.
Since I feel for the mentally handicapped, I will help you by giving you a chart that should help you to make that distinction.
http://www.tfmetalsreport.com/sites/default/files/users/u1246/oilpricing...
Yes, I realize the effects of trillions dumped on the market and the effect of 90 billion barrels floating in ships moored all over.
HOWEVER, What ever methods the BTB/W USED to have to manipulate the market's prices etc, The method they DON'T have anymore is having their partners in crime the Saudi's et al bump up production by a few million barrels per day and over night dropping the price to 10$ a barrel.
The Ability of (say) the Reagan/Bush years to do just that and bankrupt the USSR is now a nostalgic memory of the PTB/W.
Imagine how much they wish they had that ability now, and tell Iran FU and your European boycott. But Now even Iran has leverage.
WHY, Because NOBODY IN THE WHOLE PHUKIN World can produce 4 MORE million more per day Ever again.
THAT is the impact of Peak Oil.
The Saudi's for example Don't have a cost of 2$ per Barrel cost structure. NOW they have to keep the price ABOVE 90$ish per barrel or their national budget goes Tunisia/Egypt on them.
Mexico Used to get 40% of their national budget from Permex. NOW they are a failed state. With NO export.
You want to see a ONE picture image of Peak Oil? (and Mexican Unrest/collapse)
http://en.wikipedia.org/wiki/File:Mexican_Petroleum_Production.PNG
Once it goes over the Peak, IT AIN'T coming back.
THAT is some of the under the surface effects of Peak Oil.
The day to day or short term price actions is of no consquence.
None of the suppliers will increase their daily output by any magnitude ever again
No producer can make enough to lower the price, because the price is now being subjected to the hyperinflation of the last few months/years. We could replace the oceans of the world with hydrocarbons, and it would still be expensive because of the costs of pumping, refining, and shipping.
If this were caused by peak oil, the price of oil would be going up in terms of gold, not middling to down.
This is no different than 1980, except that we no longer have the ability to raise interest rates without causing the financial system to collapse.
Why was the price so high in 2008? purely speculation, or was the hyperinflation already happening? Has the cost of producing oil from the same wells increased from $10 per barrel to $80 per barrel in the last couple years? Or perhaps it is simply that gold is rising in price faster than oil, both relative to USD, so the pricing appears skewed?
Hyperinflation was already happening due to easy money policy at the Fed.
Money dried up in the liquidity freeze, so those people who were speculating with said easy money dumped it back into the market and crashed the price.
Hyperinflation is always carried to prices by "speculators". They do a remarkable job of pricing currency risk in commodities.
how again does the gold price of oil change what's in the ground and the amount of energy it takes to get out?