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If Moonose was buying in 2008 what do you think o/g companies with money and smarts are doing right now--they are buying production assets from o/g companies that didn't use good judgement and got overextended--
Just like so many of the hedge funds and people speculating with stocks and bonds when the bottom fell out...
That is why half of the market tanked---people/companies were caught short and had to sell to create liquidity...just like some o/g companies were working on borrowed time and money.
My husband worked in o/g production for more than 40 years and he has been through several booms and busts...but so many of the people who went into shale drilling had little background in the business...they were assuming the price would keep going up...
Because they believed that there was a finite capacity--that the world was hitting bottom and scarcity would rule...didn't happen...
Demand creates need for oil---new production/enhancement techniques are developed that allow deeper/more complex areas to be developed, production ensues and over time creates abundant new stream of oil to satisfy needs...
Then at that point economic recession happens, demand drops to certain extent, there is surfeit of product which further drives down price...
In addition to the issue with the dollar...
But recession or not--once capacity and over-capacity met demand at whatever level, price would have dropped...
"Why hasn't the collapse happened yet when it's been predicted for so long?"
Good question. The answer is simple. They printed $9 trillion dollars out of nothing and called it "debt". Joe Sixpack doesn't know the difference. He's home watching Dancing With the Stars.
Hey Joe, it isn't debt. It is counterfeiting. You can't get away with it forever. Brazil is tanking, Venezuela tanked last year. Russia is tanking. Even Red China is tanking. Know why? We have 95,000,000 Americans between the ages of 18 and 65 not working. Sears is about to close. Many retailers are going to lose. It isn't Amazon. It is one simple thing: lack of demand. Nearly 100 million people can't afford to buy stuff. It's as simple as that.
I doubt there will be any kind of major "collapse". The government will keep throwing some change peoples way to keep some food in their fridges and netflix on the TV.
If Moonose was buying in 2008 what do you think o/g companies with money and smarts are doing right now--they are buying production assets from o/g companies that didn't use good judgement and got overextended--
Just like so many of the hedge funds and people speculating with stocks and bonds when the bottom fell out...
That is why half of the market tanked---people/companies were caught short and had to sell to create liquidity...just like some o/g companies were working on borrowed time and money.
My husband worked in o/g production for more than 40 years and he has been through several booms and busts...but so many of the people who went into shale drilling had little background in the business...they were assuming the price would keep going up...
Because they believed that there was a finite capacity--that the world was hitting bottom and scarcity would rule...didn't happen...
Demand creates need for oil---new production/enhancement techniques are developed that allow deeper/more complex areas to be developed, production ensues and over time creates abundant new stream of oil to satisfy needs...
Then at that point economic recession happens, demand drops to certain extent, there is surfeit of product which further drives down price...
In addition to the issue with the dollar...
But recession or not--once capacity and over-capacity met demand at whatever level, price would have dropped...
The energy sector perpetual boom/bust cycle has very little to do with the rest of the economy. Unless you live in Houston or in one of the new fracking states, it simply doesn't matter other than as a possible investment opportunity if you can time the boom/bust cycle properly. Texas is now diversified enough that the state didn't collapse this time. There were an awful lot of people who piled in on oil stocks a year ago who are crying now because they mis-timed the crude oil price recovery. The only people making money were the ones shorting stocks on the way down.
And at this point in time it doesn't even matter that much in Houston which is a very diversified major city...
The US COULD sustain itself on its own production and say screw what goes on in the world but because the world's economies are so interconnected and dependent on each other that is never going to happen...
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