Recession And Depression

[Dr_Who]

Where do we put our money to benefit from a recession and a possible depression. I am not ruling out a depression with no sight of oil and commodities coming down anytime soon.

Do we keep cash, invest in gold? What else?

[The Big Ease]

this has become a very schizophrenic forum of late.

[srowe]

and phyciatric care gets more expensive by the day

[Halebop]

Where do we put our money to benefit from a recession and a possible depression. I am not ruling out a depression with no sight of oil and commodities coming down anytime soon.

Do we keep cash, invest in gold? What else?

I suspect recession is here already. Depression is a different ball game and I'd be surprised (and no doubt poorer) if we ended up there. Perhaps some people in the property and financial sectors are feeling a little more depressed than recessed though!

Recession Picks:

Stick to cash and make counter cyclical plays for consumer discretionary and financial sector investments. Ride out the fall before buying and wait for the market to start hardening. Picking the bottom comes down to luck rather than skill.

Depression / Financial Scare Picks:

High quality cash equivalents, particularly government bonds / stock - but you still have to pick the country who stays in business.

Gold mining companies with operating mines and a dividend paying policy. Avoid gold companies who need development capital / risk tolerant markets.

Oil Armageddon Stagflation Picks:

Eat $#!* and die. You can buy energy investments but its too late to buy at real value and the inevitable dip can harm you at the very point you should have readies available for companies with pricing power.

[STRAT]

Eat $#!* and die. .Lets hope it doesnt come to that :D

[Packersoldkidney]

Gold never does well in a recession/depression: the myth that it is a 'shelter from the storm' is exactly that.

The recession will be long and deep - some are even saying we will enter an 'ice age' in which there will be no bull markets for at least 10 years.

[drillfix]

this has become a very schizophrenic forum of late.

It seems to become flavor of the month like Sectors in stocks :D


Or should we say Paranoia of the Month :eek:

[Shrewd Crude]

What happened today was good... smaller falls reduce the risk of much larger ones...
all my stocks doing ok today...
Im happy...
:cool:
.^sc

[Mick100]

The recession will be long and deep - some are even saying we will enter an 'ice age' in which there will be no bull markets for at least 10 years.

I'm scared

[Packersoldkidney]

I'm scared

I never would have guessed.

[Mick100]

I never would have guessed.

Good to see your sense of humour is not entirely lost
.

[Packersoldkidney]

Good to see your sense of humour is not entirely lost
.

?????????????

[srotherh]

Gold never does well in a recession/depression: the myth that it is a 'shelter from the storm' is exactly that.

The recession will be long and deep - some are even saying we will enter an 'ice age' in which there will be no bull markets for at least 10 years.

Packer
Do you class stagflation as a recession , growth or maybe neutral scenario?
Not a trick question ,just interested

[Packersoldkidney]

Packer
Do you class stagflation as a recession , growth or maybe neutral scenario?
Not a trick question ,just interested

I don't think we are headed for stagflation - simply because the pressure to increase wages in the USA just isn't there. I think we are headed for deflation - I think everything will crash in price, including gold, oil and every other commodity. I think within 12 - 18 months oil will be much closer to $60 than $100 and I think sharemarkets around the world will continue to tank.

I think the 'decoupling' of growth economies like China and India from the USA is a complete myth and that the credit that is being wiped out in the United States will wipe out credit and growth in places like China and India and in turn wipe out the commodities bubble. This will have a devastating effect on the sharemarket in resource economies like Australia's.

[bermuda]

In the last 12 months I took 80% out of the NZ market and put it into Aussie CSG. I did not like the $NZ and knew CSG would outperform NZO.

I got severely battered during subprime, plus the January hit plus Opes prime. But the ship weathered the storms and is now headed for a big doozie of a storm.

I reckon I am go to stick it out but I wouldnt want to be holding anything apart from the energy sector.

[Lizard]

I don't think we are headed for stagflation - simply because the pressure to increase wages in the USA just isn't there. I think we are headed for deflation...

Keep talking please POK, you are making alot of sense to me. :cool:

Does that make cash the best call?

[Packersoldkidney]

Keep talking please POK, you are making alot of sense to me. :cool:

Does that make cash the best call?

Yep, Liz: cash is my call.

I think long term commodities are a good play, but buying in at the top, as most of them are close to right now, would be very stupid.

[JackSprat]

and phyciatric care gets more expensive by the day

Arr harr, in NZ psychiatric care is free, especially if you crack up and try and jump off a high building and someone catches you..........I've talked with my avatar over there :)

However, we are taking the whole financial scene here a little narrowly. Since 9/11 the shyt has hit the fan as it were and its not just the economy getting a hit but as Mr Gore would point out so to is the climate, ongoing terrorism, increased earthquake of larger proportions than ever before, tornadoes of above the highest category 5, floods drowning whole States, tsunamis of massive size and now the economy, or more specifically the American Economy.

Unfortunately or fortunately the next event likely to follow on from the American crash/disaster/wipe-out is something even more scary than a million tons of sea-water roaring up your front drive and that is as rampant nasty killer virus such as sars, chicken flu, Ebola or more likely untreatable staph infection. Just google staph.............I could go on but then someone in a white coat might come for me.......oops they can't afford white coats anymore so I should be right for now.

[srotherh]

I don't think we are headed for stagflation - simply because the pressure to increase wages in the USA just isn't there. I think we are headed for deflation - I think everything will crash in price, including gold, oil and every other commodity. I think within 12 - 18 months oil will be much closer to $60 than $100 and I think sharemarkets around the world will continue to tank.

I think the 'decoupling' of growth economies like China and India from the USA is a complete myth and that the credit that is being wiped out in the United States will wipe out credit and growth in places like China and India and in turn wipe out the commodities bubble. This will have a devastating effect on the sharemarket in resource economies like Australia's.

Packer
Obviously the inflation /deflation debate dictates which area you place your wealth to increase and at worst preserve it.
Do not believe it is a simple argument but for now I sway the other way to your view.
Think we will see a lot more inflation before we see deflation.

[Packersoldkidney]

Packer
Obviously the inflation /deflation debate dictates which area you place your wealth to increase and at worst preserve it.
Do not believe it is a simple argument but for now I sway the other way to your view.
Think we will see a lot more inflation before we see deflation.

We've already seen a lot of deflation: stock markets around the world are deflating, as has real estate since about 2005. Several of the base metals have already had their prices deflated, gold is off its highs. All we have is oil going up - primarily a factor of speculation, and also obviously a deflating US $.

The credit crunch will bring down oil - mark it down - long term I love oil as a play, but not now at the current price. I would only even consider oil as a play when it halves in price from where it is now.

[bermuda]

We've already seen a lot of deflation: stock markets around the world are deflating, as has real estate since about 2005. Several of the base metals have already had their prices deflated, gold is off its highs. All we have is oil going up - primarily a factor of speculation, and also obviously a deflating US $.

The credit crunch will bring down oil - mark it down - long term I love oil as a play, but not now at the current price. I would only even consider oil as a play when it halves in price from where it is now.

Packer,
I am surprised. Have you read Twilight in the Desert?

And this talk of speculation. If these guys were so good , why dont they speculate it will go down?

[Packersoldkidney]

Packer,
I am surprised. Have you read Twilight in the Desert?

And this talk of speculation. If these guys were so good , why dont they speculate it will go down?

Since oil was around $60 a barrel the number of contracts traded in oil has increased 20 fold, yet the actual demand for oil has largely remained static. That tells me that, yes, speculation is a rather large part of the price oil is at right now.

There is no doubt that the world is running out of oil - but it was running out of oil when oil was under $20 a barrel a mere 6 years ago. What we have here is a speculative bubble largely driven by lax monetary policy.

Can oil get higher from here? Definitely - never discount the insanity associated with a speculative bubble - but sooner or later the music will stop and those holding the oil can will be looking at extremely large losses.

Supply may well be running out over the long term - but demand is being killed by the high oil price, and it will be killed further when the credit crunch truly becomes a global phenomenon.

Oil under $70 a barrel within 18 months, if not sooner.

[underDOG]

One thing that always gets me is that even at $1.50 per litre at the pump, petrol is still cheaper than the water they sell inside at the same joint


I doubt Oil will go under $100 in the next 18 months.


as for demand, I dont think it will be "killed", there just isnt much alternatives for the NOW.


I do agree with your speculation calls, as its been quite volitile/ overly volitile.
I just disagree with the crash and demand senario.



I think we have been used to cheap oil.

why dont people mind buying water, beer and soft drinks at way more than petrol prices per litre?

[mark100]

why dont people mind buying water, beer and soft drinks at way more than petrol prices per litre?

Probably because they don't buy 60L of water, beer, milk etc in one hit


I am a peak oil believer but like POK I reckon the run has got way out of hand. The effects of $140 oil have not yet worked their way through the system. When they do, demand will drop and there will be spare production capacity again (even if only for a short period of time).

Not sure I can agree with oil under $70 but very high chance it will be under $100 in 6-12 months in my view

[Mick100]

Since oil was around $60 a barrel the number of contracts traded in oil has increased 20 fold, yet the actual demand for oil has largely remained static. That tells me that, yes, speculation is a rather large part of the price oil is at right now.

.

I'd really like to know where your getting your info from regarding the 20 fold increase in the number of contacts traded. I keep records of open interest in crude (see crude oil thread) and there has been no meaningful change in the number of contracts traded over the past 6 months. there could possibly be more speculating and less hedging but the total outstanding contracts has been fairly constant.

I'v been speculating in crude for around 3 yrs now and I watch the commitment of traders reports closely. IMO, this talk about speculators driving the price of oil is a myth. As bermuda pointed out - why don't all these people, who keep telling us that speculators are driving the price of oil, go short oil - answer, because, at the moment, they know they would get run over by a steam roller.

there's something driving the oil price higher, but it ain't speculators - think about it.

[shasta]

I'd really like to know where your getting your info from regarding the 20 fold increase in the number of contacts traded. I keep records of open interest in crude (see crude oil thread) and there has been no meaningful change in the number of contracts traded over the past 6 months. there could possibly be more speculating and less hedging but the total outstanding contracts has been fairly constant.

I'v been speculating in crude for around 3 yrs now and I watch the commitment of traders reports closely. IMO, this talk about speculators driving the price of oil is a myth. As bermuda pointed out - why don't all these people, who keep telling us that speculators are driving the price of oil, go short oil - answer, because, at the moment, they know they would get run over by a steam roller.

there's something driving the oil price higher, but it ain't speculators - think about it.

The oil supply/demand is pretty simple.

We can't get it out quick enough for the increased supply.

It's not just speculators driving the price up, the Saudi's offer to increase supply by 200,000/bbls a day doesnt even start to fill the gap.

Oil wil eventually plateau & drop off, but i'm not so sure it will go below $US100/bbl.

Remember the "experts" @ $US40/bbl that said $US70/bbl wasn't sustainable?

[underDOG]

Probably because they don't buy 60L of water, beer, milk etc in one hit


I am a peak oil believer but like POK I reckon the run has got way out of hand. The effects of $140 oil have not yet worked their way through the system. When they do, demand will drop and there will be spare production capacity again (even if only for a short period of time).

Not sure I can agree with oil under $70 but very high chance it will be under $100 in 6-12 months in my view


I know quite a few people that spend way more than a tank of gas to fill their own tanks in one night on beer:D

no problems there,

point taken.

[underDOG]

PRODUCT
US$/Barrel

Crude Oil (Brent)
140

Coca Cola
126.45

Milk
163.38

Perrier Natural Mineral Water
300.61

Tropicana Orange Juice
307.44

Budweiser Beer
447.25

Mouthwash
682.34

Starbucks Venti Latte
954.24

Ben & Jerry's Chunky Ice Cream
1,609.44

Bertoli Olive Oil
2,370.71

Jack Daniels Old No. 7 Whiskey
4,237.63

[underDOG]

http://www.gasaddict.com/lrank.php:D

Rank Liquid As purchased Price per Gallon
1 Tap Water $2.17 for 748 Gallons $0.00
2 Water $0.20 for 1 Liters $0.76
3 bottled water $7.00 for 600 Fl. Oz. $1.49
4 Lipton Tea $0.99 for 1.5 Liters $2.50
5 milk $2.50 for 128 Fl. Oz. $2.50
6 Walnut Grove Fruit Punch $1.25 for 64 Oz. $2.61
7 Mountain Dew $1.50 for 2 Liters $2.84
8 Water $2.93 for 1 Gallons $2.93
9 Water $2.93 for 1 Gallons $2.93
10 Water $2.93 for 1 Gallons $2.93
11 Water $2.94 for 1 Gallons $2.94
12 coke $2.49 for 96 Fl. Oz. $3.32
13 Gasoline $3.70 for 1 gallon $3.70
14 Bottle of Sprite (on sale) $0.99 for 1 Liters $3.75
15 Gatorade Thirst Quencher $0.99 for 32 Oz. $4.13
16 Gatorade All-Stars Thirst Quencher $0.42 for 12 Oz. $4.67
17 Purex Detergent $3.50 for 100 Oz. $4.67
18 Can of Coca-Cola $0.50 for 12 Fl. Oz. $5.33
19 Propel Fitness Water $0.99 for 23.7 Oz. $5.58
20 Kern's Nectar (can) $0.50 for 11.5 Oz. $5.80
21 Tropicana Orange Juice $3.00 for 64 Oz. $6.26
22 water $0.99 for 20 Fl. Oz. $6.34
23 coke $1.00 for 20 Fl. Oz. $6.40
24 Kraft BBQ Sause $0.89 for 18 Oz. $6.60
25 Tide Liquid Laundry Detergent $10.00 for 200 Oz. $6.68
26 Northland Cranberry Sause $2.50 for 46 Oz. $7.26
27 Welch's bottle of grape juice $0.56 for 10 Oz. $7.48
28 Bottle of Coke $1.99 for 1 Liters $7.53
29 Kirkland Signature Drinking Water $1.00 for 500 mL $7.57
30 coke $1.24 for 20 Fl. Oz. $7.94
31 SoBe bottled water $1.25 for 20 Fl. Oz. $8.00
32 pepsi $1.25 for 20 Fl. Oz. $8.00
33 Ajax Dish soap $0.99 for 16 Oz. $8.26
34 Coastal Choice Window Cleaner $1.99 for 32 Oz. $8.30
35 Sun Maid Prune Juice $2.00 for 32 Oz. $8.34
36 V8 Splash $3.00 for 46 Oz. $8.71
37 Gatorade (fruit punch) $1.49 for 20 Fl. Oz. $9.54
38 evian $1.20 for 16 Fl. Oz. $9.60
39 bottled water $1.25 for 16 Fl. Oz. $10.00
40 bottled water $1.29 for 16 Fl. Oz. $10.32
41 Antiseptic Oral Rinse from Longs Drugs $2.99 for 1 Liters $11.32
42 Kraft Salad Dressing $1.50 for 16 Oz. $12.52
43 Rock Star Energy Drink $1.50 for 16 Oz. $12.52
44 pepsi $2.00 for 600 mL $12.62
45 Long's Baby Shampoo $1.99 for 20 Oz. $13.28
46 Ivory Dish soap $2.99 for 30 Oz. $13.31
47 Coffee $2.09 for 20 Fl. Oz. $13.38
48 Cheap wine at Trader Joe's $2.99 for 750 mL $15.09
49 Listerine $3.99 for 1 Liters $15.10
50 Woolite $5.99 for 50 Oz. $15.99
51 Aquafina Splash bottled water $2.50 for 16.9 Oz. $19.75
52 Zout Liquid Stain Remover $2.00 for 12 Oz. $22.25
53 Lysol $4.00 for 24 Oz. $22.25
54 Febreze Fabric Refersher $4.99 for 800 mL $23.61
55 Bohemian Highway Chardonnay $4.99 for 750 mL $25.19
56 Herbal Essences Shampoo $4.50 for 23.7 Oz. $25.35
57 Febreze Air Effects $1.99 for 9.7 Oz. $27.39
58 Crest Mouth Rinse $3.49 for 473 mL $27.93
59 Orange Glo furniture polish $3.99 for 16 Oz. $33.29
60 Pepto Bismol $3.99 for 16 Oz. $33.29
61 Malibu Coconut Rum $18.99 for 1.75 Liters $41.08
62 Pepto Bismol $4.99 for 16 Oz. $41.64
63 Red Sky Ranch Napa Meritage Wine $9.99 for 750 mL $50.42
64 SAMY Shampoo $4.99 for 12 Oz. $55.52
65 Geyser Peak Wine $11.99 for 750 mL $60.52
66 Lubriderm Lotion $7.49 for 16 Oz. $62.50
67 Off! Deep woods mosquio repellent $7.99 for 12 Oz. $88.90
68 Vicks DayQuil $4.49 for 6 Oz. $99.91
69 Banana Boat Ultra Mist sun-block $7.99 for 6 Oz. $177.79
70 Lexmark Inkjet color refill $7.99 for 96 mL $315.06
71 cologne $79.99 for 1.4 Fl. Oz. $7313.37
72 HP Inkjet black refill $14.99 for 5 mL $11348.70

[Packersoldkidney]

I'd really like to know where your getting your info from regarding the 20 fold increase in the number of contacts traded. I keep records of open interest in crude (see crude oil thread) and there has been no meaningful change in the number of contracts traded over the past 6 months. there could possibly be more speculating and less hedging but the total outstanding contracts has been fairly constant.

I'v been speculating in crude for around 3 yrs now and I watch the commitment of traders reports closely. IMO, this talk about speculators driving the price of oil is a myth. As bermuda pointed out - why don't all these people, who keep telling us that speculators are driving the price of oil, go short oil - answer, because, at the moment, they know they would get run over by a steam roller.

there's something driving the oil price higher, but it ain't speculators - think about it.

I'm talking about 'contract swaps' - they have increased 20 fold since oil was $58 a barrel - don't have a link for you at this stage. I doubt extremely much whether you have full details of all the contract swaps for oil across the globe in any given period - the trade in oil is largely unregulated and thus inaccessable in terms of figures. The estimate of a 20 fold increase was one made by a US based Professor who specialises in the oil market - but he said that figure was conservative and probably higher. You have to ask yourself why crude oil inventories in many 1st world countries are at their highest since the turn of the decade, but oil is still going up in price.

Try these links for further reading:

http://www.globalresearch.ca/index.php?context=va&aid=8878

http://www.bloomberg.com/apps/news?pid=20601103&sid=aK1.8mAJ3kX4&refer=news

[Packersoldkidney]

The oil supply/demand is pretty simple.

We can't get it out quick enough for the increased supply.

It's not just speculators driving the price up, the Saudi's offer to increase supply by 200,000/bbls a day doesnt even start to fill the gap.

Oil wil eventually plateau & drop off, but i'm not so sure it will go below $US100/bbl.

Remember the "experts" @ $US40/bbl that said $US70/bbl wasn't sustainable?

There are supertanker ships full of oil sitting in the Persian gulf idle, because there is no one to deliver the oil to - admittedly a lot of this oil is the sulfur-heavy stuff that requires specialised refining. There is enough oil around, and demand is weakening - oil should not be this high in price, and pretty soon it wont be.

[George]

Saw former All Black captain Taine Randell and his family on
TV a few weeks back and was interested to hear that he is now
an oil trader. He said to the camera for the folks back home here
to fill up as oil was going to go higher - how does he know that
enough to say it in public???

[Dr_Who]

PRODUCT
US$/Barrel

Crude Oil (Brent)
140
Coca Cola
126.45
Milk
163.38
Perrier Natural Mineral Water
300.61
Tropicana Orange Juice
307.44
Budweiser Beer
447.25
Mouthwash
682.34
Starbucks Venti Latte
954.24
Ben & Jerry's Chunky Ice Cream
1,609.44
Bertoli Olive Oil
2,370.71
Jack Daniels Old No. 7 Whiskey
4,237.63


What about Dom Perignon and Henessey XO?

Did you guys know that the Chinese buy more than 25,000 cars a day???? What about the Indians? All the analyst talk about the minor decrease in demand in the US but fail to look at China and India.


Saw former All Black captain Taine Randell and his family on
TV a few weeks back and was interested to hear that he is now
an oil trader. He said to the camera for the folks back home here
to fill up as oil was going to go higher - how does he know that
enough to say it in public???

Cant be worst then losing all your money in a night club down at the Viaduct called "Left Field".

[bermuda]

Please read this book.

Saudi Arabia, despite massive investment, is in terminal decline.

And at least 2/3 of the world's major oil fields are in decline.

That is the reason why world oil production peaked about 3 years ago.

And that is the reason why oil goes higher. And it will continue to go higher until we have worked out a way to conserve this precious finite resource .

So we had all better do our bit and use less because the Asian monsters just love the taste of it.

[Packersoldkidney]

Please read this book.

Saudi Arabia, despite massive investment, is in terminal decline.

And at least 2/3 of the world's major oil fields are in decline.

That is the reason why world oil production peaked about 3 years ago.

And that is the reason why oil goes higher. And it will continue to go higher until we have worked out a way to conserve this precious finite resource .

So we had all better do our bit and use less because the Asian monsters just love the taste of it.

Haven't read the book, but as I said, the major oil fields of the world were in decline when oil was at $18 a barrell. In other words the decline of the major oil fields to me is a factor, but not THE factor in the fact the oil price is around $140 a barrell.

Many asian countries have cut fuel subsidies and this will have a large impact on the demand for oil from there - you are also forgetting that places like China and India are inextricably linked to the US consumer - if the latter falls the former countries will suffer the economic consequences and that will impact the demand for oil as well. Not to mention the economic impact the oil price is currently having on the global economy.

As I said, I like oil as a long term play, but the levels it has reached now are not fundamentally driven and are thus absurd in terms of investing in.

[underDOG]

another view...

Commentary
7:38 AM, 27 Jun 2008 Alan Kohler
The Age of Oil is over
TOP News
Wall St ends down on record high oil 6:52 AM
Oil jumps to new high above $US142 8:21 AM

On December 31, 1999, the Dow Jones closed at 11,497. Last night it closed at 11,453. That’s eight and a half years of zero capital growth by the greatest corporations in the Earth’s capitalist headquarters.

During that period three bubbles have burst – internet, housing and credit – and the United States began a War on Terror that has drained both its Treasury and its confidence.

But the immediate cause of last night’s 3 per cent fall on the Dow was that the oil price went above $US140 a barrel for the first time, just a few days after Saudi Arabia came to the rescue of consumers by announcing a production increase of 200,000 barrels a day. So that went well.

And the reason the oil price went above $US140 last night is firstly because Chakib Khelil, the president of OPEC, said it would, so it did, and secondly because Shokri Ghanem, Libya’s most senior oil official, said his country might as well cut production now because the world is so well supplied by Saudi Arabia.

Then again maybe it was because some shorts were covering their positions in the last 45 minutes of futures trading, since that’s when all the action in the price took place (don’t believe it).

As I drove to the airport this morning for a flight to Sydney for a few hours, I heard Michael Lardelli, senior lecturer in genetics at the University of Adelaide, talking on Radio National’s Perspective segment. Obviously he’s a genetics expert, not an oil expert, but he plucked at my airport-bound conscience.

“If you are listening to me now then you were born in The Age of Oil. A wondrous time when abundant energy has enabled humanity to work technological miracles. With enough energy we can solve any problem. Need to get to the other side of the world by tomorrow? Just fly! Need to sow and harvest millions of hectares of grain, or move a mountain, or build an island? Our mighty machines will do it for us. Need to drive 5 kilometres to the shop, or 50km to work? Now where did I put those car keys?”

Oh yes, it’s true. The world’s oil consumption is 85 million barrels a day, or 13.6 billion litres, and rising (entirely because of developing world demand – OECD demand is falling). Production is a bit less, and declining.

The price might fall again soon – it has been volatile this year after all – but the proposition that it is all due to speculation is the refuge of the blind optimist. As HFA’s Jonathan Pain wrote in Wednesday’s Eureka Report, the net long position of speculators, according to the Commodities Futures Trading Commission, is just 12,712 contracts, equivalent to just 15 per cent of daily global consumption.

Pain, like Lardelli, says the era of cheap energy is over, and one way or another it is hard to disagree. Even if the price of fossil fuel energy falls a bit, it will have to be raised again to save the planet from greenhouse warming.

It is the bursting of the fourth bubble in a decade – the cheap oil bubble.

In 2000 the crude price was about $US30 a barrel and the world spent 2 per cent of global GDP on oil. Now it’s $US140 a barrel and 7 per cent of world GDP.

Suddenly energy has replaced credit as the shortage that is threatening the economies of the west.

The difference is that when credit dried up last year, we found we could do without it. Some firms went bust, and are still going bust, because they are on a credit drip and they starve to death when it is turned off.

We are all on an oil drip.

Now, I’d better go and board that plane.

[Mick100]

Try these links for further reading:

http://www.globalresearch.ca/index.php?context=va&aid=8878

http://www.bloomberg.com/apps/news?pid=20601103&sid=aK1.8mAJ3kX4&refer=news

Yes , interesting reading - thanks for those links packer
,

[bermuda]

Haven't read the book, but as I said, the major oil fields of the world were in decline when oil was at $18 a barrell. In other words the decline of the major oil fields to me is a factor, but not THE factor in the fact the oil price is around $140 a barrell.

Many asian countries have cut fuel subsidies and this will have a large impact on the demand for oil from there - you are also forgetting that places like China and India are inextricably linked to the US consumer - if the latter falls the former countries will suffer the economic consequences and that will impact the demand for oil as well. Not to mention the economic impact the oil price is currently having on the global economy.

As I said, I like oil as a long term play, but the levels it has reached now are not fundamentally driven and are thus absurd in terms of investing in.

It is a great read.

China is bigger than I can describe.

This is a huge story and oil goes higher. I really do wish it would go back to $100 but that is only delaying the inevitable. We have peaked...and the world still runs on oil.

This is the tragedy of it. The USA should have listened to Carter.

[Packersoldkidney]

Yes , interesting reading - thanks for those links packer
,

Can never tell if you are taking the 'mick', Mick, these days, ie whether you are being sarcastic or not.

Doesn't matter - I figure if you have been long oil in the last three years you would have made a lot of money for yourself: well done.

[pago]

Can never tell if you are taking the 'mick', Mick, these days, ie whether you are being sarcastic or not.

Doesn't matter - I figure if you have been long oil in the last three years you would have made a lot of money for yourself: well done.

hi pok i agree price of oil will downturn,the question is when,my best guess is 2/3 months maybe sooner.any comment,cheers pago,

[Mick100]

Can never tell if you are taking the 'mick', Mick, these days, ie whether you are being sarcastic or not.

Doesn't matter - I figure if you have been long oil in the last three years you would have made a lot of money for yourself: well done.

Not taking the mick packer

I have read Mr Engdahl's book "a century of war" - he's no fool but I still disagree with his assumption that 60% of the price of a barrel is due to speculation

Yes I have been long oil for the past 2.5 yrs but it's only over the past 12 months that I'v racked up some serious profits (mostly still paper profits) My broker has been trying to convince me to book profits for a couple of months now but I think this run-up in price has further to go yet.
At some point the high price of oil is going to lead to demand destruction but we havn't reached that point yet

from my own observation, everybody is complaining about the price of oil but nobody is actually doing anything about it - and I'm not just talking about the polititians - I went for a bike ride today and the roads were busier than ever. I could of counted the other people riding bikes on one hand - It was a clear, fine winters day. Until significant numbers of people start conserving fuel the demand will not drop and neither will the price of oil. The question is - at what oil price will people begin to seriously conserve fuel?

[Packersoldkidney]

hi pok i agree price of oil will downturn,the question is when,my best guess is 2/3 months maybe sooner.any comment,cheers pago,

I think after the Beijing Olympics, Pago: for some reason I have that in my head as a symbolic turning point for the price of oil and other commodities - can't remember when they are on? August, September? If so, I'm on the same page as you as when the oil price will slacken.

[Packersoldkidney]

Not taking the mick packer

I have read Mr Engdahl's book "a century of war" - he's no fool but I still disagree with his assumption that 60% of the price of a barrel is due to speculation

Yes I have been long oil for the past 2.5 yrs but it's only over the past 12 months that I'v racked up some serious profits (mostly still paper profits) My broker has been trying to convince me to book profits for a couple of months now but I think this run-up in price has further to go yet.
At some point the high price of oil is going to lead to demand destruction but we havn't reached that point yet

from my own observation, everybody is complaining about the price of oil but nobody is actually doing anything about it - and I'm not just talking about the polititians - I went for a bike ride today and the roads were busier than ever. I could of counted the other people riding bikes on one hand - It was a clear, fine winters day. Until significant numbers of people start conserving fuel the demand will not drop and neither will the price of oil. The question is - at what oil price will people begin to seriously conserve fuel?

If the price of oil stays on its parabolic curve upwards people will be given no choice but to avoid using petrol fairly soon.

[shasta]

I think after the Beijing Olympics, Pago: for some reason I have that in my head as a symbolic turning point for the price of oil and other commodities - can't remember when they are on? August, September? If so, I'm on the same page as you as when the oil price will slacken.

I believe the Bejing games start 8th August (8th day of the 8th month!)

The lucky number being 8 for the Chinese...;)

POK - Are you looking to gold?

[Packersoldkidney]

I believe the Bejing games start 8th August (8th day of the 8th month!)

The lucky number being 8 for the Chinese...;)

POK - Are you looking to gold?

No: I think gold will crash in price - that's what happens in a deep recession/deflationary scenario. I think by the time the recession becomes 'deep', the Fed will have started to wake up and will then start printing money like it is going out of fashion - they are always behind the eight ball for various reasons. People think we are in for an inflationary scenario because the Fed and 'helicopter Ben' are in control of things - but they forget that the US Fed failed to stop the credit crunch and have failed in many other areas - they have a lot less control than many people think. It is only at the 'deep' recession stage that Ben and his helicopter will really come into play - the US will try and 'inflate' its way out of a deep recession. In other words, I think we are in for a deflationary scenario, followed by a hyper-inflationary scenario - it is before that time that I picture is the best window to get into gold and commodities like oil - in the hyper-inflationary time that is when I think gold will truly go gangbusters.

I can picture gold possibly going higher from where it is now - but not much higher than those highs reached earlier this year - by the time the double top comes in for gold in this scenario I think soon after it will tumble in price because of a deep world-wide recession. It will spend a time in the doldrums and everyone will write it off as an investment vehicle - that is the time to buy as much gold/gold related stocks as you can.

In the hyper-inflationary scenario that is when I think gold has the potential to reach truly stratospheric highs, almost incomprehensible highs even with gold today above $900 an ounce. I picture other commodities, especially those related to energy and PM's, doing the same thing at that time.

[yogi-in-oz]

No: I think gold will crash in price - that's what happens in a deep recession/deflationary scenario. I think by the time the recession becomes 'deep', the Fed will have started to wake up and will then start printing money like it is going out of fashion - they are always behind the eight ball for various reasons. People think we are in for an inflationary scenario because the Fed and 'helicopter Ben' are in control of things - but they forget that the US Fed failed to stop the credit crunch and have failed in many other areas - they have a lot less control than many people think. It is only at the 'deep' recession stage that Ben and his helicopter will really come into play - the US will try and 'inflate' its way out of a deep recession. In other words, I think we are in for a deflationary scenario, followed by a hyper-inflationary scenario - it is before that time that I picture is the best window to get into gold and commodities like oil - in the hyper-inflationary time that is when I think gold will truly go gangbusters.

I can picture gold possibly going higher from where it is now - but not much higher than those highs reached earlier this year - by the time the double top comes in for gold in this scenario I think soon after it will tumble in price because of a deep world-wide recession. It will spend a time in the doldrums and everyone will write it off as an investment vehicle - that is the time to buy as much gold/gold related stocks as you can.

In the hyper-inflationary scenario that is when I think gold has the potential to reach truly stratospheric highs, almost incomprehensible highs even with gold today above $900 an ounce. I picture other commodities, especially those related to energy and PM's, doing the same thing at that time.

:)

Hi folks,

... and it's good to see POK back on deck ... :)

Looking at the oil price forecast, our astroanalysis has us expecting a few
negative cycles for the oil price in 2008, but fill your tanks now, because
it would not be surprising to see POO hit $200/bbl, in 2009.

Here's SOME of the time cycles expected for oil in 2008 and 2009:

August 2008 ... expecting negative cycles on 01-07-15082008

September 2008 ... expect 2 positive cycles 17-19092008

October 2008 ... volatile oil price in October and November 2008:

10-13102008 ... negative cycle

14102008 ... positive cycle

30102008 ... positive cycle

November 2008 ... 04-05112008 ... negative cycle

13-14112008 ... negative cycle

17-18112008 ... negative cycle

25-30112008 ... positive cycle

December 2008 ... 01122008 ... minor cycle

05-08122008 ... minor and positive news

12-16122008 ... 2 minor and positive cycles

26-29122008 ... 2 significant and positive cycles - strong POO



More later about POO in 2009, but here's a preview of timing for extreme
prices, next year ..... :)

21 May - July 10 2009 ... POO will likely make its first attack at peak prices,
followed by another try, particularly around 16-25122009 ... !~!


have a great weekend

paul

:)

=====

[trendy]

Watch out.

Fortis, the Belgium bank, said today in a press release that they're expecting a complete meltdown in the US financial markets. Fortis stated they almost went bankrupt themselves, but got saved by an 8 billion injection. They expect bankruptcy of 6000 US banks in the coming weeks. Sorry that the article is in Dutch, not sure if there's an international version out already, but here it is in Dutch:

http://www.dft.nl/bedrijven/fortis/...tie_Fortis.html

Translated.

American 'meltdown' reason for money injection Fortis.
28th of June, 9:10
BRUSSELS/AMSTERDAM - Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve � 8 billion. "We have been saved just in time. The situation in the US is much worse than we thought", says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US"

"Lippens, the Fortis CEO, based his worries on conversations with bankers. "Two months ago we didnt know it was THAT bad in the US. And it will get even worse. We've got a cushion now to get through the next 18 months, when we can complete the deal with ABN Amro".

"The panic concerning Fortis is in Belgium now so big that the CFBA (the controlling Belgium government agency) directed words to the people who have money at the Fortis bank: "people shouldnt run to their banks to get their money out" said the DFBA. Fortis is complying with all legal laws."

[Dr_Who]

Whats the best way to secure ones funds in the bank if banks themselves are falling like flies? Take it out in cash or spread risk by spreading cash around the major banks? One cant be holding millions of dollars in cash under the bed!

[duncan macgregor]

Whats the best way to secure ones funds in the bank if banks themselves are falling like flies? Take it out in cash or spread risk by spreading cash around the major banks? One cant be holding millions of dollars in cash under the bed! Buy a block of land near a city and rent it out to a farmer to cover the rates. When the crash has come and gone with money doing whatever, you will still have increased value. Macdunk

[STRAT]

Buy an industrial/commercial building by all means, but why would farm land increase in value in a crash?Industrial and Comercial buildings take a bigger hit in recessions than residential I would have thought.

Macca is referring to city expansion. Imagine if you had bought a farm block in Abany Auckland 15 years ago :eek:

[shasta]

Buy a block of land near a city and rent it out to a farmer to cover the rates. When the crash has come and gone with money doing whatever, you will still have increased value. Macdunk

Macdunk's onto it :cool:

Buy the land, build an underground bunker & store all your gold & silver bullion

Reappear when the crisis is over :D

[JackSprat]

Or better still give it to me, I promise to give it back later.

[STRAT]

Or better still give it to me, I promise to give it back later.Good luck getting a Scottsman to give away land or gold:p

That said I must highlight that he has always bought me a Whisky or two at the Auckland ShareTrader meetings;)

[JackSprat]

Lots of laughs. The one I married spends it pretty well. But seriously the commodities that come to mind would be the necessities and basics; food and clothing.
Who makes push bikes?
Booze..........how's Lion Nathan doing?
Health Care Doc; nursing homes, psychiatric institutions.
Munitions factories!
Gaming and casinos; always popular in a slump-look at the millions fed into lotto each weekend http://www.ozlotteries.com/
Or maybe a few Rita Angus's.

[Dr_Who]

Gaming and casinos; always popular in a slump-look at the millions fed into lotto each weekend http://www.ozlotteries.com/
Or maybe a few Rita Angus's.

Tell that to the SKC shareholders.

[MrDevine]

These guys are pretty sober swiss bankers. I heard the report on National Radio on the way home. I guess we better button up. Of course there will be opportunties but its looking tricky.

http://online.wsj.com/article/SB121482012286515509.html?mod=googlenews_wsj

I'm getting to the point of selling up, can't handle the anxiety.

Mr D.

[Dr_Who]

These guys are pretty sober swiss bankers. I heard the report on National Radio on the way home. I guess we better button up. Of course there will be opportunties but its looking tricky.

http://online.wsj.com/article/SB121482012286515509.html?mod=googlenews_wsj

I'm getting to the point of selling up, can't handle the anxiety.

Mr D.

I am pretty much cashed up and only set a small percentage of funds aside to play the market. Playing the oil sector is great entertainment and very profitable, but the party may stop one day.

The funny thing is most of the so called "professionals" in the finance sectors I have spoken to have got the timing of the market correction totally wrong and dont believe in peak oil. These guys are now telling me that it is gonna be a short cycle. They got it so wrong first time, why would they get it right this time?

I say we are heading into a long and difficult period.