"Oil Supply Threat highest since 1970s" -Deutsche

[ammo]

point is, its not inflation, its cornering the market, to drive up price, previous reference to goldamn and gold storage was actually aluminum,of course if i was storing gold, i would say it was old pepsi cans.. http://www.reuters.com/article/2011/07/29/us-lme-warehousing-idUSTRE76R3YZ20110729 ..the fact that they are storing it means that ,unless they are wrong,(hard to be wrong when you control dc, write the rules/laws, and control the media..vote out all dems and reps) price is not coming down

 

[Random.Capital]

Quote from oldtime:

lIs that inflation? Or is it just a problem with oil? If it's inflation, then it's a fed problem.

Conversley, if some great oil field was discovered, or we figured out a cheaper way to refine it, would you then declare that we are in a deflationary cycle?

If we magically found a 100 year supply of $15/bbl oil that could come on line in six months, inflation would spike hard as economic activity would absolutely boom from current levels.

 

[Random.Capital]

Quote from ammo:

point is, its not inflation, its cornering the market, to drive up price,

Nobody is "cornering the market" on oil. Nobody - not even the countries that store the stuff in their own ground, is powerful enough to do that.

The price is what it is because we're running low on the cheap stuff and replacement volume is bloody expensive.

 

[denner]

Quote from ammo:

if that's the case why has goldman built multiple storage areas to park gold and leased multiple tankers sitting idle loaded with oil , after all historically sufficient storage facilities are full, that is not moving,the price is being gamed,and not by supply.demand ,unless hoarding is consistent with the traditional definition of low supply...how long will this stagnated economy last and what is going on behind the scenes to possibly extend it and to what end..heres a clue, the author of the opening news article is the deutsche bank.... http://www.bankersalmanac.com/addcon/infobank/bank-rankings.aspx

I'm more inclined to agree with you. In the lead up to 2008, I'd hear similar accounts and agreed that it was more of a liquidity phenomenon as opposed to the notion of scarcity.

All I have to say is that oil crashed from $147/bbl to $38 in a short six months. At least to me, that is complete evidence of a cornered market coming undone.

 

[oldtime]

Quote from Random.Capital:

If we magically found a 100 year supply of $15/bbl oil that could come on line in six months, inflation would spike hard as economic activity would absolutely boom from current levels.

well now you are getting above my pay grade. I'm not even sure exactly what inflation is except I lived through a mild bout of it and I know it is bad for everybody, rich, poor, banker or borrower.

Are you sure economic activity brings inflation?

 

[Random.Capital]

Quote from oldtime:

Are you sure economic activity brings inflation?

I'm sure lack of economic brings deflation.

But honestly, we're in the tall grass without defining all these things anyway...



The difficulty, IMO, is we keep talking about money, when money itself is the least meaningful facet of policy.

 

[oldtime]

the only thing I know about price controls was after being a vegetarian for years I had to start eating meat due to social requirements, and the only thing I could find in the grocery store was something called a "Spencer Steak" which apparently had been invented by Richard Nixon.

I'm all for a little monitering, but at some point, the fed just needs to let go and see what interest rates really are.

 

[mgabriel01]

Quote from denner:

And when oil and commodity prices rise consistently without adverse geopolitical OR weather conditions, what is your response?

as long as you buy 2 lcd big screen TVs and a laptop computer every other month
you can live comfortably within what the government calls 'a low inflation rate'

something around 2.5%

 

[Random.Capital]

Quote from oldtime:

I'm all for a little monitering, but at some point, the fed just needs to let go and see what interest rates really are.

I don't think it will work, because we would still have an even bigger rate distorter in the taxpayer-backed MBS market. That should IMO be the first thing we get rid of, because there is nothing even remotely natural or "free market" about 30 year mortgages at any rate, never mind at 3%.

 

[S2007S]

I know no one wants to believe it but the speculators in the market have really added to a huge increase in the price of commodities over the last few years.