[canis_lupus]

Connecting oil prices to other bubbles

Because oil is like housing and silver and tech stocks. Or something.

[biofuel13]

This article is sheer foolishness.

[DantesPeak]

I'm not in the mood for CNN's attempt at humor with gasoline prices on the futures market rising 25c gallon since yesterday morning.

[Cashmere]

It's all smacking of desperation now - no reason based argument about oil supply - just vague comparisons to "other" bubbles and cites to shale and sand.

Yeesh.

[Mechler]

I think this sums up the gist of the article...and why the author is dead wrong.

$this->bbcode_second_pass_quote('', 'B')ut if you stick to basic economics, it's clear that the only question is when - not if - prices will succumb.

[DomusAlbion]

You all can give Mr Tully a piece of your mind. You can post a comment to the article on the CNN website.

[GeoJAP]

I rank this as the Stupidest Article Of All Time (SAOAT), barely ahead of the previous SAOAT, which it just dethroned.

The just-dethroned, current runner up was another CNN article regarding California's precarious position as it would likely slide under the Pacific waves as a result of "The Big One". They never did exactly explain the mechanical miracle where such a large slab of continental crust would jump laterally, landing on top of adjacent oceanic crust.

[frankthetank]

Just trying to calm the masses.

[Kingcoal]

I'm not sure about India, but I know China subsidizes oil to make it artificially cheap internally. That is definitely not sustainable and when the price skyrockets in China, maybe then we will get reprieve - for a little while.

[TireFire]

Regardles of the artcile being correct or not many will believe it.

[DantesPeak]

$this->bbcode_second_pass_quote('Kingcoal', 'I')'m not sure about India, but I know China subsidizes oil to make it artificially cheap internally. That is definitely not sustainable and when the price skyrockets in China, maybe then we will get reprieve - for a little while.

[Bman4k1]

Damn, I was going to post this, you beat me too it. You know for me the depressing part isn't the fact that when "tshtf" its the fact that people still write garbage like this without doing any research. Macro-Economics you took in university will not apply to post PO.

[NoWorries]

Shawn Tully (Fortune magazine):

"An earlier bubble is also instructive. In the early 1980s silver prices jumped from $10 to $50 on the theory that the world was facing a permanent shortage of silver. Suddenly ads appeared asking homeowners to bring their tea sets and jewelry to Holiday Inns for a big price. Silver supplies poured from seemingly nowhere, out of America's cupboards, of all places.

And so it will be with oil. We don't know where the new abundance will come from, from shale, or tar sands or coal or an OPEC desperate to regain market share. We just know that it will appear. With prices like these, it always does. ..."

Although I am not a pessimist, and not entirely convinced Peak Oil is here just yet (I think current valuations are mostly due to weak US dollar, and monetary policy) I must say this item left me even more skeptical about his unbridled optimism. Does Tully think oil will suddenly come gushing forth from people's kitchen cupboards?

Also, I fail to see the analogy with the housing or tech markets. Unlike housing or technology, there is a finite supply of oil. There is not a finite supply of housing or new technology.

As for his final lines ("we just know it will appear") that strikes me as blind faith.

[emersonbiggins]

It undermines his worldview to think otherwise, and so it goes.

It really equates with Jiminy Cricket syndrome. Kunstler nailed it.

[shortonoil]

Bman4k1 said:

$this->bbcode_second_pass_quote('', 'M')acro-Economics you took in university will not apply to post PO.