by thisisit » Tue 24 Jan 2012, 14:10:04
$this->bbcode_second_pass_quote('GoIllini', '')$this->bbcode_second_pass_quote('thisisit', ' ')As Georges Bush already put it in the pass, "you are either with me or against me". Also, its not important the price you sell your oil but to who and the reason why...if you can convince saudi's they're better off with us at 50 with the right plan they will understand that its better to be pay with US dollars from a healthy US country at 50 then triple digit price with USA on the brink of collapse. As long as they get a good seat in the house you will see like them that the view on WW III is better from here in the comfort of your house...
The USA is hardly on the brink of collapse. We are swimming in natural gas and control the world's food supply. And supplying gasoline at $50/barrel will mean other people who were paying $100/barrel for gasoline now get shut out of the market and get angry. China? Maybe India? That's a very good way to accelerate WWIII.
No, the best solution is to maximize energy production, and that's to let the free market set the price. At $100/barrel, the last barrel of oil produced costs $99.99 to pull out of the ground and get to market. If we cut oil prices to $50/barrel, that oil no longer gets produced and people who could originally buy oil get shut out of the market.
Oil prices are not expensive because of the reasons people want you to
believe, it is expensive because the money sitting in hedge funds and other investment entities is use to speculate on it, its a war of dollars against dollars, fatter cat are becoming more lazy seeing it more easy to speculate than invest into something that can promote a brighter future for people while they would still make a good return. They need some help to change their view and habits...the more you will try to maximize the so call energy production the more they will leverage to the price because their source of money is greater than the ammount of oil made available. They will be thankfull for a 50 dollar oil barrel after a while because you will have open their eyes to many new possibilities they never though possible since they are blinded by the corruptive habits they developed between each other with the mountains of money made available to them by so many years of improbable promissed returns that attracted so many investors in search of the quick buck. Oil at 50 S&P 500 at 2012....
by GoIllini » Tue 24 Jan 2012, 15:01:12
$this->bbcode_second_pass_quote('thisisit', 'T')he fact remains that I don't care about Saudi's neither do you, so let's not extrapolate how they could accept to sell their oil at 50 or 35...I am beeing generous when I offer a 50 dollar target...I'd rather get it free and when I say free I mean free I only presume they would find it a right price at 50 in their infinit kindness...
But if China is willing to pay $99, we're hardly being generous by offering $50. The House of Saud will tell us to take a hike at $50/barrel. No, we need to offer $100, or we need to cut off the supply of oil to China.
$this->bbcode_second_pass_quote('', '.')..Do you really think it's time for dreams like fusion when the only fusion working right now is a brand of razor...perhaps with cheap oil we could get more people working on the serious stuff.
Actually, they've managed to create self-sustaining controlled fusion reactions. The issue is the vacuum vessel the reaction needs to occur in. Neutrons bombard the Tokamak walls, turning iron into other elements, and that weakens the reactor until it can no longer hold the vacuum anymore.
Fusion is now a materials science problem rather than a nuclear physics problem. Ironically, so is interplanetary space travel. It's all radiation materials science. How do you block gamma rays in less than 3g/cm of material? How do you design a strong material that won't be affected by neutrons?
by Armageddon » Tue 24 Jan 2012, 15:15:25
$this->bbcode_second_pass_quote('GoIllini', '')$this->bbcode_second_pass_quote('thisisit', ' ')As Georges Bush already put it in the pass, "you are either with me or against me". Also, its not important the price you sell your oil but to who and the reason why...if you can convince saudi's they're better off with us at 50 with the right plan they will understand that its better to be pay with US dollars from a healthy US country at 50 then triple digit price with USA on the brink of collapse. As long as they get a good seat in the house you will see like them that the view on WW III is better from here in the comfort of your house...
The USA is hardly on the brink of collapse. We are swimming in natural gas and control the world's food supply. And supplying gasoline at $50/barrel will mean other people who were paying $100/barrel for gasoline now get shut out of the market and get angry. China? Maybe India? That's a very good way to accelerate WWIII.
No, the best solution is to maximize energy production, and that's to let the free market set the price. At $100/barrel, the last barrel of oil produced costs $99.99 to pull out of the ground and get to market. If we cut oil prices to $50/barrel, that oil no longer gets produced and people who could originally buy oil get shut out of the market.
Once oil producing countries stop accepting worthless dollars from the US for oil, the US will collapse over night. China, Russia, India and a few other countries have already dumped the Petro Dollar and are trading oil in other currencies. The US is also having trouble selling its debt. Once you can't sell your debt, you have to monetize it. This is one of the last straws before currency collapse. Fiat currencies are unsustainable.
by eXpat » Tue 24 Jan 2012, 15:20:21
$this->bbcode_second_pass_quote('thisisit', '
')The fact remains that I don't care about Saudi's neither do you, so let's not extrapolate how they could accept to sell their oil at 50 or 35...I am beeing generous when I offer a 50 dollar target...I'd rather get it free and when I say free I mean free I only presume they would find it a right price at 50 in their infinit kindness...
How would you do that? Threaten then with nukes?
"I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it."
George Bernard Shaw
“You can ignore reality, but you can't ignore the consequences of ignoring reality.” Ayn Rand
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by GoIllini » Tue 24 Jan 2012, 15:28:25
$this->bbcode_second_pass_quote('dorlomin', '')$this->bbcode_second_pass_quote('GoIllini', 'P')erhaps we should try and break the OPEC cartel,
What cartel?
The fact that OPEC is willing to step in and cut production when oil prices drop basically helps set a floor on the price of oil. Everyone knows Saudi Arabia is turning off the derricks if oil drops below about $60/barrel- not because it's too expensive to produce, but because they're part of the cartel. That floor limits how much people are inclined to bet on a drop in oil prices.
If I offer someone a share of Chevron worth $105, most people would be willing to pay $105 for it.
But if I offer someone a share of Chevron worth $105 and promise I will buy it back from them if it goes below $70, some people will pay $110 or $115 for that. It's a concept called convexity. Oil is worth *more*- even at $95/barrel than it would otherwise be worth because everyone knows Saudi Arabia will quit producing and stabilized prices if it starts to drop below $60. That fact there probably adds about $3-5 to the price of oil even up at $95/barrel.
Is it good? Is it bad? I don't know. I would imagine that if you want us transitioning off of oil or at least saving some energy for our kids, it doesn't hurt to cut production when prices get low.
Obviously OPEC holds less power to reduce price spikes- that comes from having spare, idle capacity. But short of something worse than the crash of 2008/2009, Saudi Arabia and OPEC can certainly prop oil prices up to $60/barrel pretty darned easy. If we were to stop that, oil prices would be noticeably lower. (And also a little more volatile).
$this->bbcode_second_pass_quote('', 'O')nce oil producing countries stop accepting worthless dollars from the US for oil, the US will collapse over night. China, Russia, India and a few other countries have already dumped the Petro Dollar and are trading oil in other currencies. The US is also having trouble selling its debt. Once you can't sell your debt, you have to monetize it. This is one of the last straws before currency collapse. Fiat currencies are unsustainable.
Hardly. We control the world's grain market. Impose some grain export quotas, watch the middle-class in India and China eat gruel for a couple weeks, and watch what happens to the price of foreign labor- and the dollar. Additionally, the US, Australia, and South Korea are the only OECD countries who've seen their NET debt to GDP (including public and private) decrease over the past four years.
Seriously, grain prices aren't finished with their run-up, and we are the Saudi Arabia of the world's most important commodity- staple grains. We also have one of the world's best militaries and can keep China on their side of the Pacific if we tighten grain exports a little.
I don't think we need to get to that point, though. Consumer debt and corporate debt is coming down according to a recent study by McKinsey.
In fact, it's come down so much that it's offset the increase in public sector debt.
This isn't to say the US is in great shape. But stories of our recent demise have been greatly exaggerated. The frugal, hard-working American worker/consumer of the 1930s, 40s, and 50s is making a comeback.
by thisisit » Tue 24 Jan 2012, 15:40:52
$this->bbcode_second_pass_quote('eXpat', '')$this->bbcode_second_pass_quote('thisisit', '
')The fact remains that I don't care about Saudi's neither do you, so let's not extrapolate how they could accept to sell their oil at 50 or 35...I am beeing generous when I offer a 50 dollar target...I'd rather get it free and when I say free I mean free I only presume they would find it a right price at 50 in their infinit kindness...
How would you do that? Threaten then with nukes?
I have the answer to your question but I'm afraid it is a defense security matter, my hope is intelec in the decision office find it by them self...I suppose they are smart enough,...
by GoIllini » Tue 24 Jan 2012, 16:00:50
$this->bbcode_second_pass_quote('dorlomin', '')$this->bbcode_second_pass_quote('GoIllini', 'E')veryone knows Saudi Arabia is turning off the derricks if oil drops below about $60/barrel- not because it's too expensive to produce, but because they're part of the cartel.
Thats not a cartel, that is a swing producer.
And if you think our problem is we need to break OPEC incase oil gets back down to $60 dollars, you may not be seeing the same picture as others.
No, what I'm saying is the fact that Saudi Arabia is a swing producer keeps oil prices about $5 higher than they otherwise would be- even up here at $95-$100/barrel. If Saudi Arabia kept the spigots on until oil prices dipped below their cost of production, we would enjoy cheaper oil in the same way that you're not going to pay as much for something if you know it can go to $0 than if you knew it stopped going down at $60.
Is $100/barrel and some price stability better than $95/barrel? I guess. But to answer the real question- about ways to do something with Saudi Arabia to get oil prices down in the short-term, it's that you have to break OPEC.
Last edited by
GoIllini on Tue 24 Jan 2012, 16:02:04, edited 1 time in total.
