We cannot drill our way out of this oil crisis. Since 2000, oil companies working in the U.S. have doubled the number of wells drilled per year.
Although increased drilling has added new oil to the nation's supply, it has not done so fast enough to offset the terminal decline of existing fields.
We are going to have to import more of our oil. Period.
Joined: Oct 15, 2004 Posts: 2003 Location: Arkansas
Posted: Thu May 01, 2008 8:28 pm Post subject: Re: Oil and gold prices plunging
If you're interested in gold and you have not heard of Jim Sinclair, I think you might find his website interesting. He doesn't sell anything. He's got a million dollar bet going that gold will reach $1,600 by the first week in Jan 2011. Lately, he has opined that by the end of the first week in May, gold will have reached its low.
Posted: Thu May 01, 2008 8:36 pm Post subject: Re: Oil and gold prices plunging
Cashmere wrote:
I hope the DSE drop oil to 80 and gold to 500.
Yeah that'd be great if I hadn't already sunk so much cash into physical metals. I'd pay a big premium to get liquid at this point. This was the first time I've had any money to invest, and I'm kind of taking a beating. Bad timing.
I think I should just hold tight, but it sure doesn't make me happy watching those prices trickle down day after day. _________________ "I was born in a deep forest
I wish I could live here all my life
I am made from stones and roots
My home, these woods and roads
All my life I loved this sound
Of the woods all around
Eagles fly where the winds blow free" -Korpiklaani
Joined: Dec 18, 2004 Posts: 3549 Location: One Mile From the Columbia River
Posted: Thu May 01, 2008 9:27 pm Post subject: Re: Oil and gold prices plunging
smallpoxgirl wrote:
How in the bloody h--l is the dollar regaining strength? If the fed cuts rates anymore, they're going to be paying people to borrow money. Low interest rates are supposed to drive a country's currency down. I'm baffled by this.
Is this just all about people that thought TS was going to HTF over Bear Sterns?
It's not regaining strength SPG. That's a bunch of nonsense.
This little uptick in the dollar accompanied by the small drop in oil, gold, silver, etc... will be temporary. The general trend over time will be increased inflationary pressure brought on by the basics such as deficit spending, trade imbalance, the housing bubble, the liquidity crisis, and a movement to reduce exposure to the dollar by more and more oil producers.
This will cause further weakening of the dollar, which in turn means you should buy more gold fairly soon. And it also means everyone's energy investments are just fine, well, except those ignoring Simmons and who are still heavily invested in the majors, whose market share is dropping continuously along with their reserves while their costs keep climbing. _________________ Everything is Impermanent. Shakyamuni Buddha
Posted: Thu May 01, 2008 9:51 pm Post subject: Re: Oil and gold prices plunging
smallpoxgirl wrote:
Cashmere wrote:
I hope the DSE drop oil to 80 and gold to 500.
Yeah that'd be great if I hadn't already sunk so much cash into physical metals. I'd pay a big premium to get liquid at this point. This was the first time I've had any money to invest, and I'm kind of taking a beating. Bad timing.
I think I should just hold tight, but it sure doesn't make me happy watching those prices trickle down day after day.
Big decoupling between gold and other commodities. The media has been getting the vapours about mass starvation for months and people just HAD to have a piece of that action! ...So freaking sick. They exited gold and poured the proceeds into wheat. Stealing bread out of the mouths of babies has to be worse than stealing candy, but most investards don't see it that way.
Gold seems to be the least morally reprehensible way to preserve capital at this juncture, but we could all be wrong about whether that fine point of ethics will ever be rewarded.
Posted: Thu May 01, 2008 10:46 pm Post subject: Re: Oil and gold prices plunging
oups.. my post got lost somehow...
For me it's highly irrational. nothing has changed and the dollar rebounds. And the oil price slumped. It's as well as the strike in Nigeria stopped, but everyone knew that a strike won't last for ages.
Only one remark: I'm watching the oil price for several month now. And it's always the same: price rallies are Monday to Wednesday and the slump always occur in the second half of the week. Strange?
I really do not understand why the dollar gained strength, nothing has changed.
Joined: Nov 11, 2007 Posts: 61 Location: Portland metro, Oregon
Posted: Thu May 01, 2008 10:55 pm Post subject: Re: Oil and gold prices plunging
We are no where close to the bottom of the housing market, and have yet to peak in foreclosures, not to mention food and energy price ripple effects going through an already declining economy.
This is a buying opportunity.
Here's a bit of historical perspective regarding the official prognisticators (I.E., Believe the paid propaganda pushers at your peril...):
Joined: Dec 07, 2005 Posts: 1305 Location: Australia
Posted: Thu May 01, 2008 10:59 pm Post subject: Re: Oil and gold prices plunging
Markets don't make much sense now. Why? INTERVENTION.
It will however give many players a chance to get out of bad positions or get into new ones at better prices before trends re-insert them selves.
Personally I hope Sinclair is right about the timing, not just becasue I am long gold, but I find the most recent development so infuriating. Is there just a handful of us to see what is going on?
Joined: Dec 06, 2005 Posts: 799 Location: Stopped at the border.
Posted: Thu May 01, 2008 11:44 pm Post subject: Re: Oil and gold prices plunging
You guys don't listen to anything. I have been trying to tell you that this was going to happen for a while and giving you the reasons why and still you won't, can't seem to listen. Go ahead, buy as much gold as you can since you seem to want to lose everything anyway. You have to think about the strength of the dollar in terms of the money supply. There is a whole lot less money out there. Less money means that the dollar gains value. They are trying to hyper-inflate like crazy and they can't keep up with the demand destruction that is resultant from the crippling of the money supply.
The time to buy gold will be when its price comes down to the price of extraction. I reckon that price is somewhere around $575 an ounce. Start to buy in there and keep buying because at those levels there is some kind of floor based on reasonable equilibrium. When the next invasion happens (the Hillary Chronicles) you will be in the perfect position to double, perhaps triple your money. Of course you would probably be better served before the next invasion by shorting the S&P 500 at the lowest level you can find a put for. The powers that be are so arrogant that they really believe they can swing what they have up their sleeve, but they are not going to be able to pull it off. When the dust settles from a US military loss in the Middle East who knows how much financial destruction will also reveal itself. No Fed action will save them from that.
Of course, you don't have to listen to me, I don't know anything! _________________ "Hope encourages men to take risks; men in a strong position may follow her without ruin, if not without loss. But when they stake all that they have to the last coin (for she is a spendthrift), she reveals her real self in the hour of failure."
And that's just M1 and M2.Link _________________ "Who knows what the Second Law of Thermodynamics will be like in a hundred years?" - Economist speaking during planning for World Population Conference in early 1970s
Joined: Dec 07, 2005 Posts: 1305 Location: Australia
Posted: Thu May 01, 2008 11:56 pm Post subject: Re: Oil and gold prices plunging
I think trading a portion is a good idea. No problem there. But a core position should be held for the simple reason that when it takes off it can do so quickly.
Quote:
I reckon that price is somewhere around $575 an ounce.
I however don't see where this figure is coming from?
It is not backed up by any analysis.
I am also having difficulties in seeing the deflationary scenario.
Especially as oil is holding up and gold has either reacted just in concert with Euro or just counter intuitively to the financial news. _________________
Joined: Dec 06, 2005 Posts: 799 Location: Stopped at the border.
Posted: Thu May 01, 2008 11:59 pm Post subject: Re: Oil and gold prices plunging
Look, you can choose to look at it that way, but don't leave your reasoning with Milton Freidman, in the grave. Monetarism as a means of figuring this one out is dead because it does not explain the lack of demand brought about on the only level that counts, that of demand. It seems to explain it, but really it only begins and has no answers once it enter the cul de sac that is the poverty of the Neo-Cons and the Neo-Classisists. _________________ "Hope encourages men to take risks; men in a strong position may follow her without ruin, if not without loss. But when they stake all that they have to the last coin (for she is a spendthrift), she reveals her real self in the hour of failure."
Joined: Dec 06, 2005 Posts: 799 Location: Stopped at the border.
Posted: Fri May 02, 2008 12:09 am Post subject: Re: Oil and gold prices plunging
As far as $575 goes, that number is actually high, but I don't think (maybe I am hoping) that the route in the mining industry won't be like it was the last time gold collapsed. See, it is true that gold does have a certain value simply because people love it so and they will run to it even when it makes no sense for them to do so. So I figure that with peak oil driving up the energy side of the extraction costs and workers complaining that their F-150's are costing so much to fill up that the miners will be under a lot of pressure not to accept any less at around $625 or $600, but that they will until a few players screw themselves with their workers and wind up in a position where they can't compete with the other companies that have managed costs better. Once that happens there should be a bounce off of the low point that happens when prices seek equilibrium. If it happens like last time watch out for $375. _________________ "Hope encourages men to take risks; men in a strong position may follow her without ruin, if not without loss. But when they stake all that they have to the last coin (for she is a spendthrift), she reveals her real self in the hour of failure."
Posted: Fri May 02, 2008 12:49 am Post subject: Re: Oil and gold prices plunging
evilgenius wrote:
You guys don't listen to anything. I have been trying to tell you that this was going to happen for a while and giving you the reasons why and still you won't, can't seem to listen. Go ahead, buy as much gold as you can since you seem to want to lose everything anyway.
Who the hell are you and why should I put my money on what you say? I have my own brain and can make my own decisions thank you very much! You're entitled to your own opinions which you are free to express.......but this is NOT the place to give people advice what investments to buy or sell. If you want to do that, go open up your own hedge fund company.
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...So freaking sick. They exited gold and poured the proceeds into wheat. Stealing bread out of the mouths of babies has to be worse than stealing candy, but most investards don't see it that way.
- Just say NO
