[ReverseEngineer]

There is a certain amount of talk going on now about the "decoupling" of the Chinese and Indian economies from the US economy. In other words, these folks aren't so dependent on us to buy their goods, their economies can motor onward without us from internal demand and consumption.

Somewhat true, but not entirely true. First off, we are saddled with mountain of debt, no doubt, but who holds a lot of the paper? The Chinese. Who is investing in that economy at a mile a minute because the perception is that these "emerging" economies hold more growth potential than the American economy? Pension funds and Hedge funds of course, problem being these sources of capital are ALSO generally speaking insolvent, any money they are investing is mostly funny money, its leveraged up to beat the band. As more of these financial giants go belly up, so also does the source of capital driving the expansion of the Chindian economies.

So yea, for a year maybe the "decoupled" economies of China and India slog onward, but really they have exactly the same problem we do which is that as a multiplier of wealth, oil doesn't work so well anymore because now it actually COSTS too much to produce all sorts of stuff, including of course food. An Investor looks at this HUGE "undeveloped" market and chomps at the bit, and a million new Tata's are produced for Indians to drive around, but hey, they gotta gas them up just like we do! Does your average Indian actually make so much more than your average American that he can afford to gas up his Tata and drive from Bombay to Calcutta to visit Uncle Mahatma every weekend? He's gotta cut back also. LOL.

If we are having trouble filling up the gas tank, so is everybody else. Our economy is crashing sure, but despite "de-coupling" its all so interconnected that everyone gets drawn down into the same sewer. There are political problems going down in China now that make Tiananmen Square look like a Square Dance. Not to mention they got a million people or so displaced out of Guangzhi and Guangzou provinces as a result of THEIR flooding problems. I'm sure FukDumSucker Bernanke, the Chinese Central Banker has at least as many problems as his brother Ben here trying to print up enough funny money to keep China floating. Not like China is awash in Oil Fields you know, and neither is India. So the paper wealth actually is flowing about entirely in the direction of anyone producing and exporting oil, their general problem is that those same countries don't actually produce a whole heck of a lot of food, and you can't actually EAT oil. Anybody who produces food efficiently gets a good deal of money BACK from the oil exporters if you price up the food correctly. This is the symbiosis between the economies, and it doesn't decouple all that easily.

The fact is, while oil is getting expensive, food is getting MORE expensive, and the quantities produced will shrink faster than the oil fields go dry, because food has a tendency to go bad if its not moved around in a timely fashion. You might buy Corn Futures, but if the supplier can't deliver at ANY price, what are you gonna do? Sue him? Ask Ben Bernanke for a Government Bailout? LOL. Betting in the commodities market is outta control as big money flees equities in search of a safe haven, but commodities are NEVER safe. The freaking weather alone can run up a 20% shortfall in any given year for agricultural commodities. Oil is a better bet, you know the stuff is in the ground somewhere and it doesn't spoil or get tainted with Salmonella, but it does have the problem everybody is FIGHTING for it in the literal sense, strikes in Nigeria and threats of war in Iran and Tropical Storm Dolly working her way toward Oil Rigs in the Gulf, you can buy a contract but no sure bet there that its gonna get delivered.

The idea that oil consumption can rise inexorably in China and India is preposterous. They can't afford the stuff any more than we can, and they can't bootstrap up an industrial economy the way we did either, because when we did it, Oil was CHEAP. They might run a year or two behind us in crashing, but no doubt, they will crash also, and in some senses harder, because the bigger you are, the harder you fall, and these countries have some BIG populations to deal with.

ReverseEngineer

[HKFarmboy]

$this->bbcode_second_pass_quote('ReverseEngineer', '
')
The idea that oil consumption can rise inexorably in China and India is preposterous. They can't afford the stuff any more than we can, and they can't bootstrap up an industrial economy the way we did either, because when we did it, Oil was CHEAP. They might run a year or two behind us in crashing, but no doubt, they will crash also, and in some senses harder, because the bigger you are, the harder you fall, and these countries have some BIG populations to deal with.

ReverseEngineer

[ROCKMAN]

There’s another factor that may have a bearing on China’s net cost of oil. For quit a few years they have been buying interests in producing oil fields as well as supplying capital for expansion projects. Venz was an early target. Lately they have been shifting towards Angola, which has now become their No. 1 oil supplier replacing Saudi. I haven’t been able to quantify the net magnitude of such deals yet. And probably won’t be able to for lack of details on individual deals. But their share of the oil they’ll receive from these fields won’t be a current market price…..it will be at the net cost of their investment. I can only make a wild guess but that cost could be around $60/bbl for investments in the last year. Years ago the Chinese gov’t sunk over a $billion in Venz. That oil maybe making it to them today at a net cost closer to $30/bbl. Again, the difficulty is estimating how much of their imports are coming from these lower cost sources. The Chinese gov’t has one big advantage over traditional investors: they don’t measure the rate of return on these investments as a tradition buyer would. Their prime motivation is more the access to this oil then the profit side of the picture.

[yesplease]

$this->bbcode_second_pass_quote('Heineken', 'C')hina and India are adding thousands of new vehicles to the roads every day. Not to mention a blizzard of smaller ICEs like lawn mowers, water pumps, chainsaws, you name it.

[yesplease]

$this->bbcode_second_pass_quote('Hogan', '')$this->bbcode_second_pass_quote('essex', 'P')rice goes down, consumption goes up, price goes back up again.

[threadbear]

$this->bbcode_second_pass_quote('HKFarmboy', '')$this->bbcode_second_pass_quote('ReverseEngineer', '
')
The idea that oil consumption can rise inexorably in China and India is preposterous. They can't afford the stuff any more than we can, and they can't bootstrap up an industrial economy the way we did either, because when we did it, Oil was CHEAP. They might run a year or two behind us in crashing, but no doubt, they will crash also, and in some senses harder, because the bigger you are, the harder you fall, and these countries have some BIG populations to deal with.

ReverseEngineer

[Heineken]

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('Heineken', 'C')hina and India are adding thousands of new vehicles to the roads every day. Not to mention a blizzard of smaller ICEs like lawn mowers, water pumps, chainsaws, you name it.

[yesplease]

$this->bbcode_second_pass_quote('Heineken', '')$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('Heineken', 'C')hina and India are adding thousands of new vehicles to the roads every day. Not to mention a blizzard of smaller ICEs like lawn mowers, water pumps, chainsaws, you name it.

[Fiddlerdave]

$this->bbcode_second_pass_quote('', 'T')he idea that oil consumption can rise inexorably in China and India is preposterous. They can't afford the stuff any more than we can, and they can't bootstrap up an industrial economy the way we did either, because when we did it, Oil was CHEAP. They might run a year or two behind us in crashing, but no doubt, they will crash also, and in some senses harder, because the bigger you are, the harder you fall, and these countries have some BIG populations to deal with.

[derekj]

it seems to have fallen just in time for me.. Im doing a 4033 mile road trip in a few days in a diesel powered car. Maybe fuel prices can drop a few cents or atleast stay where there at.

[Ayoob]

Wind and sun and wave can all make their contributions, but nuclear is where the biggest strides can be made. The U.K. gave up an early lead in nuclear and only in 2008 gave the go-ahead for a new generation of reactors, though funding remains an issue. France is the most enthusiastic devotee of nuclear, with around 60 working reactors. Whatever progress can be made in turning crops into power, scale will make nuclear the fuel of the future. But governments need to wake up to the urgency with which it may be required.

http://online.wsj.com/article/SB1000142 ... opCarousel

[TheDude]

$this->bbcode_second_pass_quote('', 'B')ut the members of Jersey's production department disagreed with Page.
After all, they were geologists, and as far as they were concerned, discovering
and developing new reserves were what the game was all about. Their ambition
was to find new elephants, and they were very excited about Oman. "I am sure
there is a 10 billion barrel oil field there," a geologist who had just returned
from Oman told the executive committee.
"Well, then," replied Page, "I am absolutely sure we don't want to go into
it, and that settles it. I might put some money in if I was sure we weren't going
to get some oil, but not if we are going to get oil because we are liable to lose
the Aramco concession." With that logic, Jersey stayed out of Oman. The
geologists, however, were right. Oman did become a significant oil producer,
with Shell in the lead.

[Revi]

Well it's about time they discovered peak oil. You would think that the big money people would be intensely aware of world oil supplies.

Branson is shouting to the world, Pickens made some noise, but most people continue along blissfully unaware of what's coming.

Almost everyone has settled upon 5 years as the amount of time we may have before peak oil really hurts.

I think it's hurting already, but within 5 years we'll really feel it.

[KevO]

Wall St Journal
$this->bbcode_second_pass_quote('', 'A')gainst the gloomy economic backdrop that Europe currently provides, siren voices shrieking that a potential energy crisis is imminent and could be worse than the credit crunch are liable to be dismissed as scaremongers

[Plantagenet]

It was always inevitable that peak oil would gain more and more attention from the mainstream media and become more accepted in the business community and throughout the general public.

That process is happening now.

[eastbay]

One would think a good clue was when half of North American corn crop was burned in ICE. Wait until people, corporations, the media, and God all find out it happened five years ago and np one bothered to mention it. Except us, of course.

[TheDude]

$this->bbcode_second_pass_quote('KevO', 'I')magine in a few years from now - if you have the energy to power your compuker

[Outcast_Searcher]

From the article:

$this->bbcode_second_pass_quote('', '
')
A shortage of oil could be a real problem for the world within a fairly short period of time.

[KevO]

$this->bbcode_second_pass_quote('eastbay', 'O')ne would think a good clue was when half of North American corn crop was burned in ICE. Wait until people, corporations, the media, and God all find out it happened five years ago and np one bothered to mention it. Except us, of course.

[sparky]

.

The way I look at it , post peak there is a good chance there will be cheap plentiful oil available

For the few rich ,

most folks will have been pauperized , thus depressing their demand


.