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Oil Income Stocks Decline to New Price Lows
Crude Oil Should Offer Investors Real Opportunity In 2009
One of the things that we do need to remember is the price of oil does add or subtract reserves....as the prices go higher....more reserves are added.
most proven reserves are 90% likely of recovery....which means there is a lot of oil in the well that is recoverable....but not booked at proven....which means oil reserves can increase with time.
but the problems here....is when we figure out there is a problem with oil....we will have very little time to respond to it.......maybe only a few years before production drastically declines.......as demand will want to keep increasing....and imports does a HUGE nose dive.
The difference in just a couple of years could be 10-20% depending on decline rates of existing fields and demand of exporting nations.
Given a 5% increase of demand of an exporting country and a 10% decline rate.....if they are at the inflection point of peak production....exports will decline by roughly 10% and increasing with each year thereafter since its compounded.
The Green New Deal: Stocks That Stand to Benefit
and the depression is not like today....today banks have a whole lot of bad loans out there....and are that much more leveraged.....hedge funds on the lines of 30:1 and some banks on the lines of 60:1 or fanny/freddie 100:1 or so.
The depression was a case of a run on the banks and the banks ran out of money.....but they had solid loans.....their businesses were solid...they just ran short of cash.....and the fed reserve shrank the money supply during the same time frame. As if they wanted these banks and the morgans and such could buy all these distressed assets at pennies on the dollar.....almost like the downturn was planned.
Now....is a different story and a different game.....we need tighter lending...we need some banks to go under......and start from a fresh solid base....unfortunately.... goes against what the government wants because it brings in less taxes....all around...and unemployment.
I still don't understand how financial types can make so much money by literally moving money around.......I see this economy out of balance....and the bankers/hedge funds/mortgage brokers need to get wiped out.....as IMO don't add that much value to the system.
Oil Won't Stay Down for Long
And where were these people hoarding the oil? it sure wasn't in inventory or the SPR.
In order to kil 1% of demand.....price needs to rise 8-20% (depends on how high the price is to begin with).
So things do go parabolic if a perceived shortage might exist in the near future.
But at the same token.....once you start gaining back a supply cushion....things go just as fast in the opposite direction.
It still comes back to supply and demand.......the downside is limited to the cost of production for new supplies.....and the upside is limited to the price that a certain amount of consumers can afford at the current rate of production.
I don't know what the upside is on oil.....but the cost for most of the new oil coming online is between $40-80/barrel depending on where the oil is coming from (deep sea or oil sands). Given a 6% decline rate on conventional low cost oil fields....and a production of 74MBPD.....in 10 yrs thats roughly at 40MBPD........oil is going up long term.
The icing on the cake is the printing press......more dollers = inflation.....we might even see hyperinflation in the future......that is if people go back to the normal spending habits.
Oil Won't Stay Down for Long
The Five Most Important Energy Forecasts of 2008
40 quads
80-120 quads
2-3,000 wind turbines installed every week forever
The Five Most Important Energy Forecasts of 2008
The problem with alternatives.....is you might need to factor in a large cushion margin of safety.......and need to invest in storage of the energy. While storing energy is smart regardless of where that energy comes from....conventional sources are much more predictable.
So you can build 2MW worth of coal power plants.....and know 2MW worth of energy will be available so long you have the fuel to burn.
With wind.....given its on/off or partial power....if you require 2MW of power.....you will NEED storage....and you might need to build 20MW worth or more....given the terrian to supply a constant 2MW of power.
Now this is a peer example......and did not use any real life numbers....but I think you get the idea.
So if you take 40 quds worth of energy....and want to displace all new energy growth....and displace some energy coming from conventional sources.....you might need to build a capacity of 80-120 quds worth.....I don't know the exact number.
This could equate to building 2,000-3,000 wind turbines with todays technology every week forever and never hit the power desired.
The Five Most Important Energy Forecasts of 2008
I am also an engineer.....and people talk like alternative energy is the answer.......I think some of these economists and others need to sit down and start crunching numbers....figuring out how much energy can be provided using these technologies....what kind of baseload power is required....what kind of plants need to be running in case the wind or sun isn't shining or blowing......What are the costs to transfer to these power sources? Are there any material constraints if we massively switched to a certain storage source? etc etc etc.
The scope of such a change is enormous......and we would be moving from an era of extracting energy that is already stored......to an era of harnessing/transmittin... and storing then transmitting and storing again.
Service-Based Economy Is Progress? Show Me the Money
If your economy is outsourcing more and more labor....and not developing new ideas...then you outsource more and more wealth.
Our economy hasn't been a free economy for years upon years. We have a federal reserve system. This is a system run by international bankers.....all money created has to be paid back + interest. We then get into a circle of more money created...which is more debt...and more debt which means we need to create more money.....hence we live with neverending inflation. If all debts were paid...we would have no money in the system.
So first we need to abolish the federal reserve....and create real money backed by gold. This means we will have NO inflation.
We need to revert to a sustainable economy.....which may or may not mean producing goods/services.....and relying less on a credit card.
If we do this.....these high and lows in the economy will be eliminated. The federal reserve and the government has created all these problems....either by policy....or by how they control the money supply...and/or both.
If money has a set value.....and they cannot increase/decrease the money supply.....and policies removed to require an all out equaility...people are held responsible for their actions.....we would have a sustainable economy IMO.
The people who own the money supply are the people who control the country.....and in all honesty....most of these bubbles and busts could all be part of a bankers whim.....and to control the country into doing whatever it may wish.....or buy other companies for pennies on the dollar...etc
China Natural Gas Reports Another Stellar Quarter
China Natural Gas Reports Another Stellar Quarter
Jim Rogers Still Bullish on Commodities, Bearish on the Fed
They have sound reasoning.....and while sound reasoning may work great for long term investors....the market can act irrational in the short term. There are also small side effects that are tough to predict along the way...but their reasoning is correct for the long term.
Jim Rogers had run the Quantum fund and returned thousands of percents over a 10 or 20 yr period.....WIKI his name and it explains how well he performed in the past.
Looking forward....I believe we will hit resource constraints of some kind....food, material, energy, or clean water. I am not sure which one it will be.....and this agrees with the predictions of the club of rome. But as production continues higher for many of these materials.....the decline rates also become greater.
Its like trying to accelerate a thing with mass to the speed of light....as it gets faster and faster....and approaches the speed of light.....its energy input becomes infinite....just like production of many materials. Substitutes may or may not work......
Why the Bailout Cannot Solve a Thing: Nobody Is Blaming the Right Culprit
Why the Bailout Cannot Solve a Thing: Nobody Is Blaming the Right Culprit
Capitilism is not the cause of these failures....its the government. They set up the conditions for the housing bubble...and even encourged it.
and the sad part is.....they tried making homes more affordable....and they did the exact opposite. I don't think the government tries to create bubbles....they are just THAT encompetant.
Talk Me Down From the Wells Fargo Ledge
This could get ugly for every company out there.....regardless of what sector they are in. This was the largest housing bubble in history. There is a lot more carnage ahead.