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.
Posted: Fri May 02, 2008 3:50 am Post subject: Re: Oil and gold prices plunging
If you are investing in gold it is always worth keeping an eye one Southern African politics. Over the Jan Feb period South Africa had power problems. These were eventualy found due to a kind of affirmitive action contract to supply coal to the power stations that had gone '*** up' when the price of oil went up as the suppliers were being priced out of the market. Much lower inventories of coal stocks at powerstations also played a part. So the South African gold mines were experiancing outages, the new leader of the ANC seems to be determined to get this sorted. Also in April something rather momentus happened to increase investor confidence in the region. A ship load of arm for Robert Mugabwe was turned back from South Africa inspite of the leaders wanting him to get them, by local goverment officials applying national law and the local trade unions refusing to touch the weapons. Even as the leaders of Africa give comrade Bob a free reign the people of Africa are standing up for the people of Zimbabwe. Mozambique, Tanzania and Namibia also embargo'd the carge, although Angola let it through. Some investors see a stronger union as a bulkwark against the worst excesses of the leadership. Natuarly alot of people will argue with this but there is some confidence returning to the region.
This can have a major impact on peoples expectations of gold exports.
Obviously bussiness does not like strong unions on the whole but this time many see it as a major step away from post colonialism being the dominant political force in the region.
But be aware Jacob Zuma goes on trial for corruption later this year. That will surly play on the gold price. How it will pan out will depend on whether investors see him as a strong leader to stabilise the region or as a dangerous loose cannon.
Joined: Sep 14, 2004 Posts: 5685 Location: Rural Virginia
Posted: Fri May 02, 2008 6:51 am Post subject: Re: Oil and gold prices plunging
smallpoxgirl wrote:
Oil was down $0.94 today to close at $112.52. Not exactly what I would call a plunge. PM's OTOH, are definitely taking a beating over the last six weeks.
Twilight wrote:
Gold is just a metal. A useful tool for traders but not a great store for personal wealth. The people who think gold is money are little people who are probably going to get trampled.
Yeah. I've definitely been feeling pretty trampled lately. I bought gold at $980 and silver at $18.20.
I don't agree with Twilight's comment. The people who are going to get (and who are getting) trampled are those who trust in paper rectangles with politicians' pics printed on them. That aside . . .
SPG, invest the same modest amount in gold and/or silver each month. Just like a savings program, or a dividend-reinvestment plan with stocks. That way you "dollar-cost average."
When the POG is higher, the gold you own is worth more. When the POG is lower, you're buying a larger amount of gold.
Either way you win over the long haul (assuming we still have a long haul, that is).
For me, the bottom line is always that having something is better than having nothing. With the dollar, you risk having nothing. Gold will always be worth something.
Too many people get swept up in get-rich-quick notions and dump all their money into something at the top of the market. This can happen even to intelligent people.
Great comments, all. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Joined: Dec 06, 2005 Posts: 799 Location: Stopped at the border.
Posted: Fri May 02, 2008 9:14 am Post subject: Re: Oil and gold prices plunging
cube wrote:
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.
good luck!
Hurt your feelings have I? That was not my intention. My point is that I have been trying to tell the gold bulls for quite a while what could happen and nobody listened. I made this string of posts because I want people to pay attention to more than those that agree with them. Believe it or not, I care if I see people heading for a cliff and think I can do anything about it. If I tell you what I plan on doing what is that to you? Maybe you will listen and maybe you won't.
Maybe I am a little emphatic because I am a little tired of all of the gold bull sentiment against what I have said. Maybe I am tired of having to re-explain why I say what I say every single time because nobody wants to either check out any of my old posts when they encounter something that ought to alarm them or cruise the net in order to see if anybody else thinks like I do. Anybody can win a one sided argument. I have paid plenty of attention to the likes of you. Do you like one sided arguments or are you ready to pay attention (listening doesn't have to mean you agree) to the likes of me? _________________ "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 18, 2004 Posts: 3549 Location: One Mile From the Columbia River
Posted: Fri May 02, 2008 9:32 am Post subject: Re: Oil and gold prices plunging
cube wrote:
cube's how to get rich plan
You "only" need to know 4 things:
1) what to buy
2) when to buy it
3) what to sell
4) when to sell it
Funny Cube. People can forget the basics. I have no intention of getting rich, but my 'safety net' is even simpler than that:
1. Buy energy service and NATGAS stocks and sit on them indefinitely. It's worked quite well so far. _________________ Everything is Impermanent. Shakyamuni Buddha
Joined: Sep 19, 2007 Posts: 887 Location: Land of the Tongva tribe
Posted: Fri May 02, 2008 10:11 am Post subject: Re: Oil and gold prices plunging
alokin wrote:
joeltrout why do you think that?
I think if the Fed cuts anymore it will only be 1 and done. Inflation has to be creeping up on them and the only way to stop that is to raise interest rates which I believe we will see later this year.
The Fed initially was cutting because they hoped to spur housing. That didn't happen but we are at a point now that when the Fed cuts, interest rates to potential homebuyers does not fall. It remains the same and in some cases rises.
We have also seen the stock market rallying fom its lows when Bear Stern was taken over. We saw the S&P 500 index rise 8% in less than a month. I don't believe it will continue at that pace but it is slowly and surely going up.
I could be dead wrong but I think the Fed is going to start rising interest rates later this year. Which as you know, strengthens the dollar which I believe was beat down far too much.
joeltrout _________________ ENERGY is the basis of our industrial civilization and sustains our standard of living. It is the foundation stone of our national wealth. A nation starved of energy.....will be a nation of starving people.
Posted: Fri May 02, 2008 10:37 am Post subject: Re: Oil and gold prices plunging
Heineken wrote:
SPG, invest the same modest amount in gold and/or silver each month. Just like a savings program, or a dividend-reinvestment plan with stocks. That way you "dollar-cost average."
Dollar cost averaging works pretty well if you're on a fixed income. I'm self employed. Some months are great and I have spare cash. Other months...nothing. Just happened that I had a couple of good months at the peak of the metals pricing.
Quote:
For me, the bottom line is always that having something is better than having nothing. With the dollar, you risk having nothing. Gold will always be worth something.
Yeah. That's something I keep trying to remind myself. The major reason to own metals is because you want metals, not because they are necessarily going to translate into more or less dollars at a certain time. I agree that over the long term, the value of the dollar is going to go to zero. That in my mind is at least a five year time scale from now. My biggest goal for the next 1-2 years is to scrape together enough cash to put a down payment on a piece of land. trying to figure out where to put your savings with all this volatility is pretty difficult. Things are sky high one day and in the gutter the next. It's really hard to not be shaken and to clearly see what's happening. _________________ "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: Sep 14, 2004 Posts: 5685 Location: Rural Virginia
Posted: Fri May 02, 2008 11:25 am Post subject: Re: Oil and gold prices plunging
Good luck in your land quest, SPG. I never knew a more deserving landowner than you would be.
You can do it.
The key to amassing wealth is consistent, monthly saving (even a small amount) coupled with reducing one's living expenses to a minimum. I was determined to master that art if I did nothing else.
Get-rich-quick, buying-and-selling schemes are mostly for losers. Yah, there are exceptions.
Anyway, if you're self-employed you've already won half the battle to freedom.
Hell is taking orders from someone else. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Joined: Sep 19, 2007 Posts: 887 Location: Land of the Tongva tribe
Posted: Fri May 02, 2008 11:32 am Post subject: Re: Oil and gold prices plunging
Heineken wrote:
Anyway, if you're self-employed you've already won half the battle to freedom.
Hell is taking orders from someone else.
I actually love working for a company which pays me a steady salary. It allows me to budget for items and I never have to worry about money. I know how much I am going to make every 2 weeks until next year when pay raises come into play.
joeltrout _________________ ENERGY is the basis of our industrial civilization and sustains our standard of living. It is the foundation stone of our national wealth. A nation starved of energy.....will be a nation of starving people.
Joined: Sep 14, 2004 Posts: 5685 Location: Rural Virginia
Posted: Fri May 02, 2008 11:37 am Post subject: Re: Oil and gold prices plunging
I never FULLY knew how much I hated taking orders until I retired, Joel.
Throughout my career I focused on getting farther and farther away from the order givers. On marginalizing their control over me.
Anyway, everyone is different, and every job is different.
I agree about the virtues of a steady salary and benefits. They dovetail beautifully with wealth building along the lines I discussed earlier. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Joined: Sep 19, 2007 Posts: 887 Location: Land of the Tongva tribe
Posted: Fri May 02, 2008 2:01 pm Post subject: Re: Oil and gold prices plunging
Gandalf_the_White wrote:
Sell! Sell! Sell!
[look down at watch]
Oh lunchtime!
[return to the trading floor exactly 30 minutes later]
Buy! Buy! Buy!
I would be a billionaire if it were only as simple as that.
joeltrout _________________ ENERGY is the basis of our industrial civilization and sustains our standard of living. It is the foundation stone of our national wealth. A nation starved of energy.....will be a nation of starving people.
Posted: Fri May 02, 2008 2:33 pm Post subject: Re: Oil and gold prices plunging
Heineken wrote:
Good luck in your land quest, SPG. I never knew a more deserving landowner than you would be.
Awww! Thanks.
Quote:
The key to amassing wealth is consistent, monthly saving (even a small amount) coupled with reducing one's living expenses to a minimum. I was determined to master that art if I did nothing else.
Anyway, if you're self-employed you've already won half the battle to freedom.
Hell is taking orders from someone else.
Well...I agree in principle, but I think the key for me amassing wealth may be a bit different. I have a practice in Montana that is loosing money by the bucket load. I have been flying to Seattle every week to have enough money coming in to make ends meet. I ended up with a net income of $18K last year. I am in the process of moving to Seattle so I can work more (for other people), and reducing my exposure to the Montana clinic. With some effort I should be able to move into a more typical physician income for this year.
General Westmoreland had a three part plan for winning in Vietnam:
1. Stop loosing.
2. Get ready to win.
3. Win.
My plan for amassing wealth looks sort of similar. Right now I'm working on steps 1 and 2. Stop loosing money and get ready to make money. I'm looking for an apartment in Seattle, putting out resumes, and pulling back from my involvement in Montana.
Realistically I can make more money by giving up my Don Quiotesque attachment to the Montana practice and doing more work than I can through any sort of investment scheme. _________________ "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
Posted: Fri May 02, 2008 6:08 pm Post subject: Re: Oil and gold prices plunging
evilgenius wrote:
...
Hurt your feelings have I? That was not my intention. My point is that I have been trying to tell the gold bulls for quite a while what could happen and nobody listened. I made this string of posts because I want people to pay attention to more than those that agree with them. Believe it or not, I care if I see people heading for a cliff and think I can do anything about it. If I tell you what I plan on doing what is that to you? Maybe you will listen and maybe you won't.
Maybe I am a little emphatic because I am a little tired of all of the gold bull sentiment against what I have said. Maybe I am tired of having to re-explain why I say what I say every single time because nobody wants to either check out any of my old posts when they encounter something that ought to alarm them or cruise the net in order to see if anybody else thinks like I do. Anybody can win a one sided argument. I have paid plenty of attention to the likes of you. Do you like one sided arguments or are you ready to pay attention (listening doesn't have to mean you agree) to the likes of me?
...
Thanks for the advice buddy!
but it's okay I think I'll survive without your help.
If you know so much about investing why don't you amass extreme wealth and buy that 15,000 sq ft mansion.
You can show how much you "care" about us by inviting us over to a party sometime.
BTW I still think gold is in a long term bull market. You may recall after Hurricane Katrina in 2005 there was a massive sell of in commodities almost across the board just like right now. Oil went from $80 down to $50. All the "mainstream" news people loudly declare the end to the commodity bull market....but we all know what happened after that. Prices skyrocketed afterwards: gold, oil, wheat, rice, etc... All markets go through boom and bust cycles and yes commodities will go bust in the future, but not now. I believe we still have at least 5 more years before this commodity bull market ends. When gold hits $3,000 and oil is $300 then I'll start to get scarred and say folks maybe we're at the top?
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