70 buck a barrel oil matched by rising airfares...talk of rationing.

[A Squared]

In the 70's gold went up above 800 and silver to 50?

Right. Silver went up because of the Hunt Brothers' bid to corner the worlds' supply of silver. As I recall, it didn't work and they went broke. SIlver got quite a bit chaper after tha.

 

[jetflyer]

ATP,

Is there really spare capacity right now of 1.7 mbd? I thought spare capacity was at 0 and we were using every barrel produced.

Have you read anything on Russia lately?

Russian oil executives are saying now that they will not be able to increase oil production as much as they thought and that the world shouldn't depend on them for extra supplies.

Many are saying Russia is about to decline pretty hard because projects into Western Siberia have not really begun and current fields are past their prime.

Russia going down will be bad news. So would Saudi Arabia.

Don't worry though. Be happy

Jet

 

[jetflyer]

A Squared,

Yea it was like 4 bucks until like 2-3 years ago. It's been on a tear lately as demand is outstripping supply now and is above 13. They can't get the silver out of the ground fast enough.

My forecast for 5 years from now: $3000 gold, $150 silver

Let's see how close I get.

Now if the bird flu kills off 5% of the world's population demand will not outstrip supply and the world will see deflation in my opinion.

Same as in oil. If the bird flu kills off literally demand for oil, if it goes human to human transmission, oil prices will crash because of excess oil on the market.

WHO experts say we have a 50/50 chance of the bird flu going H2H. Besides a bird flu outbreak, I don't see anything stopping precious metals.

I do wonder if a world wide great depression would depress demand, but I don't think if there is another depression it will be a deflationary one this time, and I think people will flock to precious metals.

Jet

 

[Dangerkitty]

Danger,
Whatever dude.
Jet

Whatever dude? That's it? Whatever dude?

 

[jetflyer]

Whatever dude

 

[Dangerkitty]

Whatever dude

Why would people flock to precious metals during a deflationary depresssion?

Are you going to answer that with a whatever dude?

 

[CrimsonEclipse]

Russia going down will be bad news. So would Saudi Arabia.

Don't worry though. Be happy

Jet

Saudi is presently in decline. The reports will show this in about 6 months.

Life will go on, but in a slightly different form.

CE

(but will it increase the demand for beer?)

 

[jetflyer]

CE,
You serious?

I've seen where the Saudis recently admitted that their current fields would be in decline by 8% if they weren't increasing the number or drilling rigs.

If they truly do go into massive decline like Cantarell in Mexico, the North Sea's oil, or Australia's we and every other American are truly gonna need to go buy some beer!

Could we then see demand outstrip supply in beer and have a beer price super spike? Geeze this makes so much sense to me, I'm going to have to hoard beer along with my oil now!

Oh and Danger read my sentence again. It was definitely poorly written, but what I meant was I don't see the next depression being deflationary but inflationary if we have one.

Adios,
Jet

 

[jetflyer]

New Fed Chief Ben Bernanke is even being nicknamed by many as Hellicopter Ben, because he said in the past that to keep deflation from happening he would drop money from helicopters.

He would increase the money supply as much as he has to, to stop deflation.

Did you see that Ben also stopped M3 or the increase in money supply from being shown to the public at the end of March?

Many predict he's going to try to inflate away the government's and American's debt by printing money and depressing the U.S. dollar.

Stocks will go up in price, so will oil, gold, commodities, etc. but the U.S. debt will be significantly less significant if the dollar tanks.

So as Bernanke gives the public face that he's fighting inflation by raising interest rates, he's printing money at a record pace which causes inflation!

The last published M3 figure showed an annual money supply increase of 8.5% which was published in March. We'll never know again what the M3 is. It will now be a secret.

One more reason to buy commodities....

Jet

 

[CrimsonEclipse]

Afraid so, The problem with the Peak Oil effect is that it never shows itself
until 2-5 years after it actually happens.

On a long flight from Argentina, I had the pleasure of being seated next to
an oil company employee. He was an advisor to a company that finds fields
and exploits them. He told me about the technologies to bring oil to the
surface and the costs involved.

This Gent was in Brazil negotiating a contract to drill off shore Brazil. They have
the largest untapped oil reserve in the world. It is also the last large reserve
of its kind.

The last large reserve was supposed to be Nigeria. China won that contract.
The US contractors were smart to let that one go. It is not producing
anywhere near what was hoped for.

Is it bad?
yes

Is it REALLY bad?
Yep

Human sacrifice, dogs and cats, living together, MASS HYSTERIA!!??
um...no. Not yet.

Expect moderate turbulance.

CE

(*pulls ejection handle*)

I'll miss it.