shirgall Posted December 30, 2014 Posted December 30, 2014 When the Saudis have suppressed fracking for long enough for all the states to ban it safely, the price will come back up.
AynRand Posted December 30, 2014 Posted December 30, 2014 My understanding and I haven't seen the video above so I might be wrong, but My understanding is that the middle eastern companies want to win the monopoly of oil so they are selling oil for next to nothing in the hopes that us Americans will plug our well Then when American's stop producing oil the middle eastern countries will charge far more for the same oil.
J. D. Stembal Posted December 31, 2014 Posted December 31, 2014 It's not just OPEC production, but a hangover from the Federal Reserve ending of QE3 monetary manipulation. The analogy Peter Schiff uses to explain taking away QE is like a magician pulling out the table from underneath the table cloth and dishware and expecting them to levitate. Schiff on oil, investment bubbles and the Fed: It's time to start buying into oil producers, because what's going to happen is the little fish are going to flounder and get bought out by the Haliburtons and Exxon Mobils, then the upheaval will swim upstream to the lending banks. Some of the smaller players will go out of business or get bought out, then the larger banks will begin to weaken with the taxpayer on the hook for the FDIC insured losses. Meanwhile, the Federal Reserve will begin QE 4 (infinity), which will send commodity prices through the roof and eventually crash the dollar. Then, it will be default time for the U.S. government. What I'm not clear on is how soon this devaluation will spread into housing and how far it will fall. What if QE infinity can't save the housing market? I've heard of some of people selling, downsizing or moving to renting until the storm blows over. The trick is pulling out at the right time if you are currently holding real estate. The turnover process will take years to sort out, but in the mean time rents will be falling all over the place as landlords desperately compete for tenants, so there could be some cut rate rentals out there in the next few years. It will be very interesting to see the real estate bubble deflating at the same time commodity prices are skyrocketing. It is interesting to note that falling oil prices have not decreased airline ticket prices or food prices yet. The economy is like a gigantic bubble that is deflating in stages, and petroleum is the first phase. One of the problems is guessing when each shoe will drop, and when the Fed will step in. We may never see a retreat in food prices depending on how ambitious the next stimulus package is. In summary, if we are to take Schiff's analysis seriously, we should be buying commodities, precious metals, and related assets, and ditching financial stocks and real estate. If the Fed actually raises interest rates next year, you want to be cashed out into U.S Dollars. Reference the linked videos to see why Schiff doesn't think this will transpire.
WasatchMan Posted December 31, 2014 Posted December 31, 2014 I agree with shirgall. Fracking and horizontal drilling are expensive ways to get oil and pretty much requires $100/barrel oil prices to be economically viable. Saudi Arabia doesn't have to spend much to get their oil. In fact, they have typically held back production to keep oil high. However, now North American oil production is rivaling which is messing with their previous strategy. So what they are doing is increasing production so that oil prices stay too low for fracking and horizontal drilling projects to be viable. I was just in Alberta (a major oil producer) over the holidays and they are already getting ready for major layoffs in the oil industry. The thought is that once the already existing projects are completed, no new fracking or horizontal drilling projects will start. Oil will go back up once they have sucked the momentum out of the fracking industry.
fractional slacker Posted December 31, 2014 Posted December 31, 2014 Can one make any sense of a market built on cloud castles of smoke and mirrors? Schiff is one trick inflation pony, but at what point does he lose credibility? Oil is down, gold and silver have fallen and now sideways.
Lians Posted December 31, 2014 Posted December 31, 2014 Can one make any sense of a market built on cloud castles of smoke and mirrors? Schiff is one trick inflation pony, but at what point does he lose credibility? Oil is down, gold and silver have fallen and now sideways. An oldie but goldie: The game has logical rules, but when the players -- the guys with the guns -- play whac-a-mole with the inputs, it turns into a pretty chaotic environment.
PGP Posted December 31, 2014 Posted December 31, 2014 What is really needed is an algorithm to run the whole show. Everything would run swimmingly according THE PLAN. To take advantage of this, I recommend investing in barb wire and Siberian real-estate. And candles.
shirgall Posted December 31, 2014 Posted December 31, 2014 What is really needed is an algorithm to run the whole show. Everything would run swimmingly according THE PLAN. To take advantage of this, I recommend investing in barb wire and Siberian real-estate. And candles. You left out heirloom seeds and iodine pills. 1
powder Posted December 31, 2014 Posted December 31, 2014 Can one make any sense of a market built on cloud castles of smoke and mirrors? Schiff is one trick inflation pony, but at what point does he lose credibility? Oil is down, gold and silver have fallen and now sideways. was listening to Harry Dent a little while ago, he has a different take and conclusions regarding the direction it will all take - quite to opposite of the inflationary bubble/skyrocketing gold prices mantra. He thinks the opposite will happen when the de-leveraging begins. Massive deflation and dropping of prices for everything including gold and silver - he says cash will be king. like everyone else, his predictions have fallen short the last few years as no expected or predicted the QE stuff to happen, a real game changer. I saw it coming and got out of the market before the 2008 crash, I too was expecting interest rates to go up after. sold two houses, rented, waited for the big sales... If I were running the game and wanted to impoverish everyone I think the plan is a good one. the first wave (Real estate bubble, 2008) takes out 40% and a lot of the middle class wealth is wiped out. prop up the system with easy money and drop interest rates to chase the rest of the wealth into the financial markets and speculative real estate to inflate another bubble. then hit em again. when will it pop? I do think that 2015-2016 will be the time when we will see the next big shift - whatever that will look like. I am also willing to bet that it will happen in a way that will make us say, again, "wow, didn't see that one coming"
fractional slacker Posted January 1, 2015 Posted January 1, 2015 powder - Very few in the liberty movement, from what I know which ain't much, seem to take the deflation side. Japan, although different demographics than US, has been mired with stagnant economy or deflation for decades. Just not sure why Schiff and the other inflationistas believe that can't happen here. In theory The inflation theory, while plausible, has not yet played out. I suppose it could start tomorrow, but at some point it becomes a faith based platform detached from reality IE religion, global warming.
wdiaz03 Posted January 1, 2015 Posted January 1, 2015 powder - Very few in the liberty movement, from what I know which ain't much, seem to take the deflation side. Japan, although different demographics than US, has been mired with stagnant economy or deflation for decades. Just not sure why Schiff and the other inflationistas believe that can't happen here. In theory The inflation theory, while plausible, has not yet played out. I suppose it could start tomorrow, but at some point it becomes a faith based platform detached from reality IE religion, global warming. I don't know, but a big difference between Japan and the US is that the dollar is an international currency and there's a lot of dollars outthere. A trigger could send those dollars back into the US to trade those dollars for actual goods and this will increase prices.
Karabesh Posted January 1, 2015 Posted January 1, 2015 This is an excellent read http://www.peakprosperity.com/blog/90662/keep-your-eyes-prize
J. D. Stembal Posted January 1, 2015 Posted January 1, 2015 powder - Very few in the liberty movement, from what I know which ain't much, seem to take the deflation side. Japan, although different demographics than US, has been mired with stagnant economy or deflation for decades. Just not sure why Schiff and the other inflationistas believe that can't happen here. In theory The inflation theory, while plausible, has not yet played out. I suppose it could start tomorrow, but at some point it becomes a faith based platform detached from reality IE religion, global warming. Deflation could happen, but people would have to start paying down their debts. Are speculators and investors going to do this with rates so low? No, the Fed will have raise rates in order to compel them to start saving and sitting on cash. If debts begin to disappear, the money supply will contract and our boom-bust economic cycle turns to bust for a very long time. What are the chances that the government won't intervene and allow deflation to run its necessary course? Since the Fed is vocally opposed to deflation, they will likely vault into even more bond-financed quantitatively easing in order to stimulate the economy and avert deflation. After that happens, the Fed will not be able to take the Dollar of the drug of easy credit without the entire economy screeching to a halt. There is only one real option for the US Dollar at this point, seeing that we are approaching 60 trillion dollars in debt as a nation. We are almost beyond the point of no return. http://www.usdebtclock.org/ If we go toward the deflation route, no individual debtors will be allowed to declare bankruptcy or have their debts absolved. Anyone who can't pay off their debts will have to enter into indentured servitude/debt slavery. Who knows exactly how many years of this bitter medicine we will need to salvage the dollar from our past excesses? Not one will be discussing philosophy or morality. We will all be expected to do our part to save the country and the dollar, or else move into a 4' x 8' one room apartment for the rest of your life.
powder Posted January 2, 2015 Posted January 2, 2015 good assessment ETU, you are likely right on the mark there. Interesting to see how the BRICKS countries are moving to disengage from reliance on the US dollar as well. I will be keen to see how it plays out over the next couple of years.
shirgall Posted January 2, 2015 Posted January 2, 2015 Just remember that the real reason behind the wars on Iraq and Libya were because they wanted to change to the non-petrodollar based exchange for their oil. Syria is about the Leviathan gas field. Ukraine is about Gazprom's supply to Europe. Greece (and Cyprus) are about natural gas terminals (they sold swathes of beach, and Greece's energy company as part of the bailout)... etc. etc. Follow the money.
powder Posted January 2, 2015 Posted January 2, 2015 Just remember that the real reason behind the wars on Iraq and Libya were because they wanted to change to the non-petrodollar based exchange for their oil. Syria is about the Leviathan gas field. Ukraine is about Gazprom's supply to Europe. Greece (and Cyprus) are about natural gas terminals (they sold swathes of beach, and Greece's energy company as part of the bailout)... etc. etc. Follow the money. exactly, and part of the idea behind the BRICKS movement is to start using a currency other than the US dollar to buy oil, and with countries like these too large to bully, ...
J. D. Stembal Posted April 28, 2015 Posted April 28, 2015 The end run on the dollar and the rise of precious metals (as well any other commodity not bolted down) may have already begun. J. P. Morgan Chase has acquired 8.3 ounces of silver in the past two weeks alone. http://www.shtfplan.com/headline-news/report-jp-morgan-chase-prepares-for-crisis-by-stockpiling-silver-an-exceptionally-large-amount_04242015
shirgall Posted April 29, 2015 Posted April 29, 2015 8.3 ounces is not really that much. I've moved 20 times that putting down a deposit on a rental house for my move to Redmond.
J. D. Stembal Posted April 29, 2015 Posted April 29, 2015 8.3 ounces is not really that much. I've moved 20 times that putting down a deposit on a rental house for my move to Redmond. That should read 8,300,000 (I neglected to mention 6 zeros) ounces, but then you would be moving into a secret underwater lair, perhaps in the Puget Sound.
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