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The Pursuit of Wealth and Its Consequences
Oil Majors Should Just Buy Real Gold
After all, this used to be the case by default for all current assets before 1971.
How Long Will The Price of Oil Remain This Low?
With respect to US demand destruction, petroleum product supplied is down 7% from Apr 18 08 to Nov 28 08. It appears to have bottomed in the second week of October 08 and has climbed back into the normal range since then (for now anyway). This is easily verified at the EIA's website:tonto.eia.doe.gov/dnav....
As for Japan, consumption was well down in August, but I don't quite see a Wile-E Coyote style trend going on here long-term. Consumption continues to hold steady at around 5m bpd. Check the graph on page 2 of this document, again put out by the EIA: www.eia.doe.gov/emeu/c....
To be sure, demand GROWTH will drop somewhat worldwide, but does this justify a 66% drop in value peak to date? I suppose only if the amount of debt used by speculators-gone-bust was on average 66%.
Another thing to keep in mind is that the world's major oilfields are declining at approximately 6% per year. See www.iea.org/textbase/p.... This is the natural progression of maturing oilfields. And with no exploration - doesn't pay at today's values - I can see trends reversing sooner rather than later.
Perhaps some of the oilcos are storing oil in tankers because they know an oil to $US trade right now could end up being a bum deal.
Deere Execs on Ethanol and Commodities
-Much of the remains of distillation become animal feed - thereby freeing up other crops (and acerage) dedicated to such.
-The water used to produce ethanol returns to the environment as wet distillate which evaporates or is ingested by animals, and/or as a product of combustion when ethanol is burned.
Also here's another question that inquiring minds might want to know:
If we are producing more ethanol than ever before... why aren't there any "tortilla riots" going on right now?
What Does the Recent Saudi Gold Rush Mean?
At $10/oz, they would have been able to pick up 350M oz., more than twice the amount in the COMEX warehouse (in theory).
A question I'm wondering about (and I don't know the answer), is why - knowing that the silver market is so tiny compared to the gold market - someone doesn't take a stab at being Hunt 2.0?
Time to Fill Up on the Strategic Petroleum Reserve
The other long term side benefit in developing 'local and diffuse' sources of energy is that this will reduce geopolitical tensions.
Wind power, solar power and biofuels can be produced virtually anywhere. The technologies are simple and proven. Every nation can do this. There is more than enough renewable energy to supply ALL of the world's energy needs.
If you remove the tensions due to the procurement of energy, there will be fewer reasons to station large armies in the desert.
From being in this industry, I know the economics are currently marginal for these projects. But society needs to grow up and make sacrifices if necessary to do the right thing.
The Stock Market Is Not the U.S. Economy
www.bloomberg.com/news...
If you’re getting into trading seriously, I think it’s important to understand this. Ironically, these rational proprietary programs (basically more sophisticated investools), helped cause the very irrational crash of ’08, by going into self-reinforcing routines that kept triggering lower and lower stop-loss sell orders, overriding all fundamentals.
It’s fascinating to observe that when the future is supposedly predicted, the very knowledge of the prediction en mass ends up changing the future outcome.
IMO trading is a huge waste of time and effort directed toward something that provides little to no value to society. However, there is opportunity now to pick up bargains while the “masters of the universe” try to figure out what went wrong and reset their code for the next irrational move to the upside.
Trump to Lenders: You're Sued!
Talk about killing the golden goose.
The Most Misunderstood Chart of All Time
I think the other interesting thing this graph shows, is that in effect, the productive capability of the nation is more and more flowing to debt since money became fiat.
It is also interesting to see in this graph that post-fiat recessions (early 1980s, 1990s and 2000s) are mere blips compared to the 1930s.
I think this trend ends up in one of two places: you hit a theoretical max and oscillate about this max, or have hyperinflation and all debts are cleared.
The Bleak Christie's Sale
That way a painting could be bought and sold multiple times simultaneously (on paper), and many people would be able to enjoy owning works of art and speculating on their values without actually owning them.
(I'm joking of course - we really don't need this)
Why Jim Rogers Is Still Bullish on Grains and Gold
I remember during the tech boom everyone was calling Buffet a man of the past and out of touch because of his archaic habit of focusing on fundamentals. He was eventually vindicated.
The Home Ownership Bubble
Home ownership might be a bit of a misnomer - the other trend that is going on behind this graph is that increasingly, new "owners" are basically renting from the bank.
Is the Financial Industry Salary Boom Over?
It will be nice to see useful people finally getting paid what they are worth (and vice versa).
Sluggard Silver
With respect to silver production, approximately 60% comes from other metal mines as a byproduct.
When commodity values drop below the cost of production, these mines will simply shut down.
In a normaly recessionary environment, the existing surplus warehouse stockpiles will be drawn down unitl the price rises above the cost of production and the mines then reopen.
However, In our bizzare recessionary environment, the existing stockpiles of silver (and all metals by the way) are by all historical standards...LOW. It is estimated that there are now approximately only 1 billion oz available to investors compared to 20 billion oz in the 1970s. This is the result of decades of skewed trading to the short side making silver almost not worth the effort to mine and produce.
Watch this market closely to see if Adam Smith eventually triumphs.
Gold in a Credit Crisis
A speculative short position is NOT A FUND LIQUIDATION, it is capital at risk. A speculative short position in a silver secular bull market - equal to the entire COMEX warehouse stockpile - is an INSANE level of risk...
...unless one knows it is a sure thing.
For an alternative view on these matters, check out www.investmentrarities...