[mkwin]

$this->bbcode_second_pass_quote('DantesPeak', '')$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('DantesPeak', '')$this->bbcode_second_pass_quote('mkwin', 'T')here is 7.5 million barrels of new capacity coming online next year but it a won't hit a peak production until 2009-2010, which could be when the recession really bites. So short-term, yes I think the oil price could fall back to the $70-80 range. So that is the time for everyone to buy the futures contracts!

Source: http://en.wikipedia.org/wiki/Oil_Megaprojects

[evilgenius]

Is gold going to fall? There are two main reasons why it can immediately. One is that investors have to cover other bad investments so they have to sell their gold. The other is that the dollar can stage a recovery and gold will have to fall because its rarity compared to the movement of the dollar isn't out of sync like oil is due to an increasing rate of depletion. Inflationary panic, a panic that believes that ever greater amounts of the same monetary instrument can solve the reason for the panic or protect those threatened by that reason, could upset any downward movement of gold in a hurry. Delationary panic, a panic that destroys a significant amount of money in the money supply, would seize gold by the throat and shake it violently. Deflationary panic because it causes less money to be available to vote for the worth of things means that in the equation of things gold will have less monetary value. Gold doesn't have the utility that oil does, neither can it be eaten, so gold plays second fiddle to those commodities given a defaltionary panic. Add to this the potential for lack of belief by a person in the economic cycle bringing back one's gold should it be spent and gold has a lot of weight to lift during a deflationary depression. Oil wouldn't have so much weight to lift because it has utility, and its utility is made to have value (disincentive to seek alternatives) because of mass supply. IMO oil would play out a longer arc to worthlessness than gold would.

[mmasters]

If anything the essential commodities aren't going to crash.

With peak oil, crazy politicians and non negotiable infrastructure, oil can only go higher. With oil going higher we have costs across the board going up as explained all over the site. We have wacky weather worldwide that is bad for crops and water sources. We have biofuel programs that are reducing crop supply. We also have a growing population and a newly globalized economy.

You want to fortify your wealth invest in essential goods and services.

[DantesPeak]

$this->bbcode_second_pass_quote('mkwin', '
')It is simply a catalogue of the current oil projects in development right now, their total peak capacity and their delivery date. The information comes from company reports, websites and other publications and is simply compiled together to give projections.

[cube]

$this->bbcode_second_pass_quote('evilgenius', 'I')s gold going to fall? There are two main reasons why it can immediately. One is that investors have to cover other bad investments so they have to sell their gold. The other is that the dollar can stage a recovery and gold will have to fall .....

[mkwin]

$this->bbcode_second_pass_quote('DantesPeak', '')$this->bbcode_second_pass_quote('mkwin', '
')It is simply a catalogue of the current oil projects in development right now, their total peak capacity and their delivery date. The information comes from company reports, websites and other publications and is simply compiled together to give projections.

[Kingcoal]

$this->bbcode_second_pass_quote('', 'J')une 30 (Bloomberg) -- Commodities are heading for their best first half in 35 years. The next six months may not be as rewarding because record prices for oil, copper and a dozen other raw materials may crimp consumption and encourage growth in supply.

[anarky321]

non-energy/non-food commodities are doomed by definition at the time of PO (price-wise at least)

its all downhill from here on

[Jotapay]

Including precious metals? I know you can't eat silver, but I don't see them declining as much, relative to the other more severe implosions which will occur around them.

[alecifel]

Copper production peaked worldwide in 2004. That's why bums can make a pretty good load of cash stripping copper wire and wheelbarrowing it in. The market, however, does not seem to realize that $4 copper is not a bubble. Economists are like news anchors; they get stuck on a "word of the day" and all of a sudden that's all they can say. Right now, that word is "bubble".

Copper isn't going to go down with PO either. What are our alternatives to liquid, combustible fuels?

Fuel cells. Require copper and platinum.

Nuclear Energy. Requires copper for transmission and enriched uranium.. enriching uranium requires very high grade aluminum... extracting aluminum requires huge amounts of electricity. (copper).

Solar Panels: work by the photoreactivity of high grade silicon passing electrons to copper.

Wind Power: a turbine consisting of steel plates and large copper coils that create a current when wind force is applied.

Ethanol: requires a copper lining on the fermentation vessels to prevent corrosion (although stainless steel can also be used; but it takes a lot of electricity to make stainless steel)

And so it goes. The point is, peak oil isn't going to collapse the price of copper, platinum, aluminum, gold, silver, or even steel. It's going to drive it up. When the speculators figure that out, you can count on these industrial metals to go up even further.

Follow the money anarky321!

[anarky321]

yes, including precious metals

there are alot of gold bugs flying around this nest, but once it sinks in that we are in a deflationary environment there will be no more floor to support such high prices for them

the current upsurge in the prices of commodities is partly due to the widespread belief that inflation in the US is out of control; this is incorrect; money supply is being tightly regulated and credit has imploded just like we've been predicting for years, setting the stage for a spectacular deflationary meltdown that has only just begun

it makes little sense to hold gold in a deflationary downturn unless the country whose cash you hold is in risk of default (a rather remote although quite possible scenario for the US); it also makes little sense to hold others' debt as the risk of default rises dramatically in such conditions

thats my take on it; feel free to argue your point from the inflationary side of the argument

[alecifel]

I guess the whole issue is inflation or deflation? Typically deflation is the result of a glut. I think you'll see a lot of deflation on things that we have a glut of... hot dog griddles, styrofoam shoes and singing catfish plaques... but the raw resources - energy, industrial metals, and grain - are going to be bid up in the market until demand destruction creates a glut.

Although the U.S. has shed a lot of gasoline demand in 12 months, there's only so far it can go until it runs into the restrictions of its living arrangements.

As far as being at risk of default, I would place the US in a "high risk" category. The national debt - held by foreign central banks in the form of T-bills - is astounding. If a currency begins to look like its going lose a lot of value, those central banks are going to line up at the Fed to cash their checks. Then, you have a hyperinflation -- and god help us all if that turns out to be the case.

So, my position is this : if you need it, it's going to inflate; if you want it, it's going to get cheap.

[Jotapay]

I foresee a relatively long period of stagflation, mainly due to high demand and scarcity of some natural resources. Bank failures may precipitate bouts of deflation, but I do not see deflation being the primary force for long periods of time as it was in the 1920-30s.

[Heineken]

The commodities "bubble" will never burst because demand is now essentially infinite, thanks to the long-running global development frenzy and soaring population. A huge new consuming infrastructure, that was never there before, is now deeply entrenched. At the same time, supplies of nearly all commodities are crimped, and energy costs, which will never be cheap again, ensure that their extraction, processing, and transport will remain devilishly expensive and get even more expensive.

It isn't a commodities bubble, it's a new paradigm. A new reality that was easily foreseen but more often denied.

Yes, recession will bring demand down around the edges. But no sooner than prices for commodities ease off, demand will again take off, bringing prices to new heights. The cycle will repeat, ever more destructively, until this civilization gets shaken to death.

We've painted ourselves into a corner and there's no way out without getting very messy feet.

[DantesPeak]

After a very brief period of deflation it has been more or less the official policy of the US since 1933 to respond to a financial crisis by creating inflation.

The dollar was devalued 75% in 1933 to stop deflation, and contrary to what some say, it actually worked - that is it did stop deflation but did not stop economic collapse.

wikipedia history of US dollar

Since November 2007, the US dollar - in reality the Fed paper dollar - is now 60% backed by loans to banks/brokers and other securities, mostly derivatives. This is a great debasement on par with the 1933 devaluation.

I give deflation a low probabilty and its likely that we will see a continuation of hyperinflation in commodities as we go forward.

[dinopello]

$this->bbcode_second_pass_quote('Kingcoal', '')$this->bbcode_second_pass_quote('', 'J')une 30 (Bloomberg) -- Commodities are heading for their best first half in 35 years. The next six months may not be as rewarding because record prices for oil, copper and a dozen other raw materials may crimp consumption and encourage growth in supply.

[MrBill]

$this->bbcode_second_pass_quote('', 'C')urrent high oil prices are different from previous oil price spikes, Exxon Mobil's chief executive said on Tuesday, and reflect unprecedented global growth.

Rex Tillerson told the World Petroleum Congress the oil industry was cyclical and record oil prices reflected this but "behind this cycle is something new", namely dramatic growth in the developing world.

Tillerson said resource nationalism and re-writing contracts could hinder the industry's ability to keep oil markets properly supplied.

"When energy prices are high the temptation to cut partnerships are high .. but it it's a temptation we must resist," he said.

[Micki]

$this->bbcode_second_pass_quote('', 't')here are alot of gold bugs flying around this nest, but once it sinks in that we are in a deflationary environment there will be no more floor to support such high prices for them

[Heineken]

Who cares about the "price" of gold?? It will be worth something, whereas the dollar will be the worthless paper it is.

[anarky321]

$this->bbcode_second_pass_quote('Micki', '
')The deflationary scenario you are suggesting is where cash is king. That will absolutely NOT apply to US$. If US$ is going down now, how on earths name is it going to strengthen once the financial debacle truly sets in.
There may be a contraction in US$ as a total, but foreigners will shun it and it won't be used for international trading.
Of course some other currencies may and will benefit, but a lot of money that would have been in US$ will have to go elsewhere.