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Your President At Work
On Sat, 1 Mar 2008 20:25:28 -0500, "Eisboch" wrote:
"Short Wave Sportfishing" wrote in message .. . On Sat, 1 Mar 2008 14:32:58 -0800 (PST), wrote: Everyone says 4 dollars... I will throw my prediction in, I think we will test 5 dollars a gallon before the end of the year. I'll take that bet. I'll say that gas will be back at $2.34/gal by the end of the year. And oil will be down around $60/bl. I don't know about that. There's nothing on the horizon to influence it that way. I'd like to hear your reasoning. It's pretty simple - it's a huge commodity bubble. There is absoutely nothing, and I mean nothing, to support these levels in any sense of the word. It's too much money chasing too little profit - a sort of currency inflation if you will. If I'm right, and I'm pretty sure I am, economic data will provide the catalyst for the crash - sometime around the middle to the end of July. Supplies will rise due to decreased demand. Take this past week for example - crude stocks are at six year highs and gas is at a four year high - distilates are at normal levels - and every one of them experienced a increase in price. It's just not logical, sustainable or in any way makeing economic sense. And when it doesn't make economic sense, it's a bubble. Secondarily, the dollars decline is also unsupported against the Euro, the Loonie and Yen - there is no actual economic reason why the Euro is reaching the values it reached this past week, same with the other currencies we use as a measuring stick for relative value. Eventually, the pendulum will swing back to the safest currency in the world's economic structure the dollar. This will also force the price of oil to return to more rational levels. There will be a glut - you're just starting to see it and by July, it will be not be pretty. I'm willing to say July - may be as last as September, but it will happen and it will be quick when it does. In a way, I think it would be good for oil to hover around $100 a barrel for a couple of years or more. In the past, every time there has been a sharp uptick in the price of oil a bunch of lip service has been given to finding energy "alternatives" and to decrease or eliminate our dependence on oil. But, as soon as the price retreats back to half of the increase, all the enthusiasm goes away and it's back to business as usual. I agree, but if it does, there will be a significant economic dislocation. The current spike in oil prices has produced some serious commitments by industry (more so than governments) to develop alternative energy sources. (the government still thinks "corn" is the answer). The auto industry is tripping over themselves introducing high mileage hybrids. There is a serious revival of interest and new developments in solar power that are very promising and exciting. I was just reading about a new auto soon to be introduced by Volkswagen that is a diesel/electric hybrid (catches my attention!) that offers very good performance while delivering 60+ mpg. About freakin' time - I've been saying that for years. For the first time, it seems like the consuming public is having a mind set change and are beginning to accept and even demand highly efficient products. There's even a growing acceptance of the need for new nuclear power plants. Agreed. Nukes are the way to go. Unfortunately, the morons in the environmental movement are hell bent and determined to derail anything nuclear. We really can't afford to screw up again and treat this oil price cycle as another temporary event because the next cycle will probably put us out of business. Agreed. |
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