That's very true, Revi, and the forces of deflation may overwhelm all of the inflationary ones. But bear in mind that it's not just supply and demand considerations that impact price. It's also how the currency holds up in the international markets. It seems to me that a lot of what we are seeing is a pre election set up, which could easily be followed by a rate cut. A "strong" dollar will result in massive layoffs, a real Great Depression scenario. No politician in his right mind is going to choose this over inflation. It will be left for the next administration to deal with. Right now we are living in a completely artificial economic construct, so it's very hard to gauge anything accurately.

I think you are right. It's weird how gas and oil are going down and the dollar is strengthening. I think it is the usual pre-election set up. They are up to their old tricks again.

I expect the cost of things we really need to start climbing again around November 4th.

It depends how deep the manipulation is and it's collateral and unintended effects. I don't think that they can keep all the wheels on the cart for very long. I'm going to start a new thread with an article by Mike Whitney that contains an interview with Micheal Hudson, an economist. It's one of the best I've read about what is going on now. I think it deserves it's own thread or I'd post it here.

oh nozz, doom dooo0OoOm D000OOOoooOOOOOMMMM!!!

So it went down to $101.74.

Was that *it* ?

1. OPEC has just announced a production cut of 520,000 barrels per day.

2. The Beijing Olympics shutdown is scheduled to be lifted next week.

3. USDX is rapidly approaching the 80 resistance level.

So.

Was that *it*?

OPEC decided it's time to put in a bottom. Can't wait till tomorrow's inventory numbers to solidify matters.

Oil will drop to 99.00 tomorrow.

$100.10

How low can we go?

A lot lower.

I, as well as others like smallpoxgirl, said oil was going to go to the 200 day moving average which was at $110 or to an extreme low of $100.

Well we went to the extreme low and hit there today.

I'm saying the bottom is in. $100 is an enormous psychological and technical barrier as we consolidated up and down from $85 to $100 for months before finally breaking above $100 for good.

Also the OIX, Oil Stock Index, has risen greatly for the last two days even as oil fell. The stocks are telling us the bottom is in.

The stocks went down 2-3 days before oil reached its peak at close to $150. Now they're leading on the upside.

The bottom will be here at $100. I'm sure of it this time

Oh also GOLD bounced off $735 which was the high in 2006 before it plummeted from that level. I'm not as sure but I think the bottom is in for gold as well.

Chuck

Concur.

One more thing:

The old decades long low in the US Dollar Index was around 80.50.

Guess what? We're there now.....

Chuck

But you do realize 6 other oil benchmarks are already below $100?
http://www.upstreamonline.com/market_da ... arkets_oil
I'm not so sure about the psychological barrier.

Yet oil is dropping like a lead balloon?

According to a report I heard a portion of while tuning accross my radio dial this morning the President of Russia (Mendeyaved?) is reassuring his stock market that he will not let the price fall much further because the income they get is too important to the Russian economy.

Given that they have added 3 Mbbl/d in the last five years to their production rate it shouldn't be hard for them to have 'maintenence issues' that cause a 'temporary reduction' big enough to drive the price back up.

I dunno if they have the stones to actually try it, only time will tell.