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Old 08-15-2008, 06:34 AM
 
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Interesting analysis presented in this article.

Could oil plunge to $65 a barrel? - MSN Money
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Old 08-15-2008, 06:38 AM
 
Location: Londonderry, NH
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Yeah, $65 oil will come along in a train made of $300 gold.
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Old 08-15-2008, 07:05 AM
 
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Quote:
Originally Posted by GregW View Post
Yeah, $65 oil will come along in a train made of $300 gold.
I would bet on that before $200 oil in a $1000 gold train....assuming the U.S. dollar doesn't completely tank.
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Old 08-15-2008, 07:24 AM
 
Location: Raleigh, NC
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Quote:
Originally Posted by StoneOne View Post
I would bet on that before $200 oil in a $1000 gold train....assuming the U.S. dollar doesn't completely tank.
Bwahahahahahahaha!

I guess Prez Obama is going to let cash be king and let those without it starve on the street (remember, few really have cash with our neg savings rate).

No my friend. He is going to engage in a money printing effort the likes of which you have never seen before. The virtual money out there invested by the Chinese, Saudis, etc hasn't even been spent and recirculated yet.

Actually, both would do the same.
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Old 08-15-2008, 10:02 AM
 
Location: western East Roman Empire
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Quote:
Originally Posted by ViewFromThePeak View Post
Bwahahahahahahaha!

... to engage in a money printing effort the likes of which you have never seen before .... both would do the same.
To be sure, regardless of the next president, most likely the US will continue with its inflationary monetary policies.

The only issue to be solved out of this election is whether the US will add suicidal fiscal policies to its suicidal monetary policy mix.

People with media power spew out predictions for various reasons. One famous oil investor just predicted that oil will not go below $100.

The message I receive here is that the issue is, in economic terms, how volatile energy and commodity prices will be, and in what range, as a function of fits and starts in economic growth in what will very likely be a lengthy period of overall stagnation until we achieve another technology breakthrough.

In this environment, people with the right set of resources, skills, astuteness, and willingness to work hard can make still make progress, even in the face of stagflation.

One can dodge the bullet of suicidal monetary policy, then.

What really worries me is getting caught up in a crossfire of both suicidal monetary policy and suicidal fiscal policy at the same time.

The risk is great, but the risk of doing nothing, like a sitting duck, is greater.

Good luck!
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Old 08-15-2008, 10:19 AM
 
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We've had inflationary monetary policies since the early 1970s (arguably since the 1930s), and we've seen periods of extremely cheap oil and commodities. I don't see the two as being that related, especially given that other countries do the same thing. I'm not saying they're good, but there's no apparent correlation.

Europe is slowing down. Japan is stagnating. The U.S. economy, while seriously underperforming right now (it's always underperforming in my book), has a lot more built-in competitiveness and flexibility, which should allow for a quicker comeback than in other places. I would bet on continued dollar strength and lower oil.

I've predicted one more round of moderate/low oil prices (not cheap) before demand really catches up and seriously constrains supply. At that point, oil will simply become too expensive and alternatives will take over, at least for most non-commercial transportation fuels. Should happen in another generation or so.

By the way, today, at $112, we're already closer to OPEC's unofficial target price of $78 than to the July 11 high of $147.
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Old 08-15-2008, 10:44 AM
 
Location: western East Roman Empire
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Quote:
Originally Posted by StoneOne View Post

We've had inflationary monetary policies since the early 1970s (arguably since the 1930s), and we've seen periods of extremely cheap oil and commodities. I don't see the two as being that related, especially given that other countries do the same thing. I'm not saying they're good, but there's no apparent correlation.
The inflationary policies of the 2000s have been extreme. Furthermore, the US has never faced such a wide array of competitive forces globally.

In relative terms at least, the US has lost competitiveness and, on the current path, it could become permanent.

Quote:
Originally Posted by StoneOne View Post
.... The U.S. economy, while seriously underperforming right now ..., has a lot more built-in competitiveness and flexibility, which should allow for a quicker comeback than in other places. ..
Nonetheless I agree that, with the right set of policies, the US can overcome the present situation, and probably better than most places.

Quote:
Originally Posted by StoneOne View Post
oil will simply become too expensive and alternatives will take over, at least for most non-commercial transportation fuels. Should happen in another generation or so.
I agree that this is the likely path. In the short and medium term, however, volatility may be such that a lot of players will be knocked off the field, so to speak.
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Old 08-15-2008, 10:48 AM
 
Location: The Great State of Texas, Finally!
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Today $112 barrel
July 11 $147 barrel.
Yet a gallon of gas has only gone down about 20 cents from its high. Hmmmmmmm.
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Old 08-15-2008, 10:58 AM
 
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Originally Posted by bale002 View Post
The inflationary policies of the 2000s have been extreme. Furthermore, the US has never faced such a wide array of competitive forces globally.
I agree that under Bush II, it's been extreme. I don't think Obama would be likely to continue along that path, and I seriously doubt he would make it any worse. McCain might also moderate things a bit. I would see both as going back to business as usual before the last 8 years, but probably not much better.

Quote:
Originally Posted by bale002 View Post
In relative terms at least, the US has lost competitiveness and, on the current path, it could become permanent.
In relative terms, yes. But I refuse to believe that the economy is a zero sum game that requires us to lose in absolute terms at the expense of somebody else's gain. I'm hopeful that we won't continue down this ruinous path any longer, though. Given Washington's track record, the best thing would be balancing the budget and a nearly complete laissez faire approach to the economy.

So much of the "competitiveness" of other places, particularly Russia, India and China, comes from either extreme amounts of money from oil and gas exports (Russia) or highly subsidized oil fueling general economic boom (China and India). I honestly don't know how sustainable it is if both countries cut back on energy subsidies. We certainly haven't lost anything to Europe in terms of competitiveness.
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Old 08-15-2008, 11:00 AM
 
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Quote:
Originally Posted by cobolt View Post
Today $112 barrel
July 11 $147 barrel.
Yet a gallon of gas has only gone down about 20 cents from its high. Hmmmmmmm.
There is not an immediate correlation between the two. Gasoline futures are traded as a separate commodity from oil. Oil refining is a completely different business from crude oil production, just as product transport is. It takes a while for prices to adjust, and there are a lot of other factors that affect gasoline prices (local demand, refining disruptions, transport disruptions, ethanol prices, etc.).
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