[shortonsense]

$this->bbcode_second_pass_quote('pstarr', 'S')o if I can paraphrase for the incredulous:
--economics trumps geology

[Voice_du_More]

The "low" prices we are seeing now are being caused by an overshoot just as the high prices were caused in some way by a bubble. The real trend line says $90 this summer if demand comes back if not we should still see $60. The problem is that the system is very complicated and well,... in general humans are not. That is both good and bad.

So let me recap what happened since around 2000. There was an irrational exuberance about tech stocks which burst. Then there was 9/11 which has it's roots in US foreign policy in OPEC countries basically. Then we were told that the way to avoid the recession following the tech bust from turning deep was to tak eout a loan even if you were not really qualified and to run up our credit cards, it was only our patriotic duty. So, helped along by some really greedy guys on Wall Street we did. Then Iraq, Katrina, 5 Trillion in ARM's, the oil price spike as demand was slow to catch on to the limits that where creeping in from all sides...and then... the housing bubble burst leading to a financial catastrophe of biblical proportions which then lead to a major deflationary trend which has now brought us to the precipice of GM going bub-bye. The worst has not yet hit the rest of the world, so we have like a bomb going off in the US and the shock wave spreading around the globe, a truly global disaster. But the earth is round and not flat so the shock waves that go out from here will return to us from abroad by early next year by which time the King of the South will have had to withdraw his troops from several theatres to handle the unrest in America.

Now back to low prices, it is an overshoot in some ways downward at $30. If there is any hint of a recovery oil is over $70 within a week, maybe in a couple days if that is possible. You have to look at a curve of oil production versus projected demand growth, we are just at the point on the decline curve where the system begins to feel that the needed growth in cheap energy is not going to come fast enough. Another three to five years of this and every major army in the world will be heading to the Middle East to lay claim to what remains of 'their' oil. Along the way are going to be some very unusual weather events, and some troubling astronomical portents.

Just wanted to try to add some context to the idea that oil is cheap.

[shortonsense]

$this->bbcode_second_pass_quote('Voice_du_More', '
')
Just wanted to try to add some context to the idea that oil is cheap.

[Voice_du_More]

Yeah, and there is this talk of the inflation adjusted high etc. Well, the issue is context sensitive, as the system evolves the impacts of price changes and volatility can be vastly different. We are in a paradigm now where we aboslutely positively have to have our oil supply grow YOY by at least 3-5%. The problem is the world supply of cheap oil is actually shrinking by something like 3-9% per year. It does not take long for that situation to make it hard for banks to keep lending like crazy because there is no promise of future growth to support the currency policies. Hyperinflation is going to slam the US like a rogue wave unless we keep shrinking by 4-8% per year. That cannot happen without the consequence eventually being a break down in civil order. This stuff has ben war-gamed and think-tanked to the hilt, they are well aware of what the risks are, and what's more everytime you see anyone in the know on TV you can see it on their face, they know the problems are way over the top. I think they are just trying to keep a lid on it, and invest in a few programs to make sure they know who the potential organizers of and insurgency would be etc. But in the end they know like we do that the game is over.

[shortonsense]

$this->bbcode_second_pass_quote('Voice_du_More', 'Y')eah, and there is this talk of the inflation adjusted high etc. Well, the issue is context sensitive, as the system evolves the impacts of price changes and volatility can be vastly different.

[shortonsense]

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('', '[')b]I thought we had gone over this? Oil isn't cheap, and if you have a valid reference to someone who has calculated how "cheap oil supply is shrinking at 3-9% a year" I would absolutely love to see it.

[mos6507]

$this->bbcode_second_pass_quote('pstarr', '
')So what is your point? Can you be concise?