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I say we stop using oil and let the 3rd world swim in the black stuff (and drink it)
- Thread starter stock777
- Start date
http://hsgac.senate.gov/public/_files/052008Masters.pdf
It's not those 'other' countries. It's not producers. The supply is more than ample. Oil is plentiful.
Speculators "consumed" as much additional oil as China in the past 5 years (848M barrels) while gasoline stockpiles have risen from 1.1Bn gallons to 3.5Bn gallons and natural gas stored by speculators has gone up from 331M BTUs to an insane 2.3 Billion BTUs. Aluminum - 10x, Nickel - 5x, Zinc - 10x, Copper - 7x, Gold - 10x, Silver - 15x â Madness!
In fact, Index Speculators have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years."
It's all there, irrefutably so, in the hard, cold numbers.
It's not those 'other' countries. It's not producers. The supply is more than ample. Oil is plentiful.
Speculators "consumed" as much additional oil as China in the past 5 years (848M barrels) while gasoline stockpiles have risen from 1.1Bn gallons to 3.5Bn gallons and natural gas stored by speculators has gone up from 331M BTUs to an insane 2.3 Billion BTUs. Aluminum - 10x, Nickel - 5x, Zinc - 10x, Copper - 7x, Gold - 10x, Silver - 15x â Madness!
In fact, Index Speculators have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years."
It's all there, irrefutably so, in the hard, cold numbers.
4.09 is a cold hard number too. That's what I paid tonight for regular unleaded gas at a Chevron station.
You guys think that congressmen who want to hit oil companies with a windfall tax are too socialist?? Under my presidency I wouldn't bother with a right wing windfall tax, I'd nationalize Chevron, throw it's officers and jail and then ask Exxon if they want to be next. I'll remind them that my buddy Hugo used to be a paratrooper so they had better not mess around.
You guys think that congressmen who want to hit oil companies with a windfall tax are too socialist?? Under my presidency I wouldn't bother with a right wing windfall tax, I'd nationalize Chevron, throw it's officers and jail and then ask Exxon if they want to be next. I'll remind them that my buddy Hugo used to be a paratrooper so they had better not mess around.
Quote from ByLoSellHi:
http://hsgac.senate.gov/public/_files/052008Masters.pdf
It's not those 'other' countries. It's not producers. The supply is more than ample. Oil is plentiful.
Speculators "consumed" as much additional oil as China in the past 5 years (848M barrels) while gasoline stockpiles have risen from 1.1Bn gallons to 3.5Bn gallons and natural gas stored by speculators has gone up from 331M BTUs to an insane 2.3 Billion BTUs. Aluminum - 10x, Nickel - 5x, Zinc - 10x, Copper - 7x, Gold - 10x, Silver - 15x â Madness!
In fact, Index Speculators have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years."
It's all there, irrefutably so, in the hard, cold numbers.
Its not a conspiracy, guy.
Speculators wouldn't have the means or motive to hoard all those commodities if the FED (and ECB, BOJ and BOE) didn't drop their pants on rates and flood the world with cheap money since 2000.
Thats what happens when you print far too many dollars than the economy can handle.
More dollars chasing after the same amount of assets, equals.......what?
Inflation, dude.
Think about it.
Cheap money allows people to borrow at minimal cost.
People, being motivated by profit, see that cheap money can be invested elsewhere (like equities, real estate, or, say commodities) where the return on that investment will be greater than the interest they have to pay.
Viola. Profit.
So people - across the globe - take loans from commercial banks and invest them in all the assorted sectors just mentioned.
Often times, bubbles form due to the herd like behavior of people.
Real Estate is first in line because, fundamentally, home sales are tied closest to rates. Low rates and not enough homes = frenzied buying and RE development. Smart money piles in. Then the masses. Then the FED stops the party and bagholders walk home, sullen in the night.
But all that smart money doesn't go away. It goes somewhere else. A new sector. This time, it piled into commodities which were fundamentally driven by the inflationary RE boom earlier in the decade. And so on and so on.
Smart money seeks profit. It doesn't sit in an interest bearing savings account earning a negative 5% after inflation.
Its aggressive. It finds opportunities and front runs.
The rub is speculators can't afford to margin crazy if the cost of money is high. Whose going to leverage at 100 to 1 when the juice on that 100 is 10 or 15%. Thats tough.
And that takes the wind out of the sails of most funds and institutional investors that can barely eek out 20% a year - with margin cost at 3%.
Think about it.
At 15% interest, most funds would close shop because they can't make enough profit to cover the cost of the juice and have enough left over to satisfy their investors.
POOF. GONE. Speculation days are over.
Now the guys that can take 40% YOY outta the market stick around. But they are few and far between.
All this money out there - some 75% of funds can't beat the S&P - all that money is gone when rates go up. This whole financial industry thrives on cheap money because funds can't survive without it. Because they can't trade worth a shit.
Interesting premise.
Cheap money allows people to borrow at minimal cost.
People, being motivated by profit, see that cheap money can be invested elsewhere (like equities, real estate, or, say commodities) where the return on that investment will be greater than the interest they have to pay.
Viola. Profit.
So people - across the globe - take loans from commercial banks and invest them in all the assorted sectors just mentioned.
Often times, bubbles form due to the herd like behavior of people.
Real Estate is first in line because, fundamentally, home sales are tied closest to rates. Low rates and not enough homes = frenzied buying and RE development. Smart money piles in. Then the masses. Then the FED stops the party and bagholders walk home, sullen in the night.
But all that smart money doesn't go away. It goes somewhere else. A new sector. This time, it piled into commodities which were fundamentally driven by the inflationary RE boom earlier in the decade. And so on and so on.
Smart money seeks profit. It doesn't sit in an interest bearing savings account earning a negative 5% after inflation.
Its aggressive. It finds opportunities and front runs.
The rub is speculators can't afford to margin crazy if the cost of money is high. Whose going to leverage at 100 to 1 when the juice on that 100 is 10 or 15%. Thats tough.
And that takes the wind out of the sails of most funds and institutional investors that can barely eek out 20% a year - with margin cost at 3%.
Think about it.
At 15% interest, most funds would close shop because they can't make enough profit to cover the cost of the juice and have enough left over to satisfy their investors.
POOF. GONE. Speculation days are over.
Now the guys that can take 40% YOY outta the market stick around. But they are few and far between.
All this money out there - some 75% of funds can't beat the S&P - all that money is gone when rates go up. This whole financial industry thrives on cheap money because funds can't survive without it. Because they can't trade worth a shit.
Interesting premise.