$262 barrel of oil?

[antarti]

One of the smartest things I ever did was stop looking at fundamentals, technicals, etc. and start paying attention to what industries "own" the President, and invest accordingly. I've slept very well ever since.

I think the replies concerning oil shale and alternatives might be more than just a bit optimistic...

Has anybody seen the latest M3 figures? Soon we won't even have them to look at, but the trend is obvious. We're on track to surpass 2005 in only the first 6-7 months of 2006. What good is an oil price of $90 to these industries when the dollars are worth half? The shale will stay in the ground, and not be competitive with oil (at least in this country).

The housing bubble is in the whipsaw period, in it's last throes. It's time to clear out any debt, and prepare for some lean times ahead. Some PMs and lots of ammo could end up being very valuable in such a climate. Heck, the .22lr cartridge could replace the cent as our new minor currency unit if things get desperate enough.

IOW, I am "long" ammo...

I don't need George Soros (or Nostradamus) to tell me that--I can figure that out all by myself.

No kidding, the destruction of the dollar is none of his doing, he's just an observer watching us self-destruct, so he can (no pun) capitalize. The commodities bull is going to run (if history is any guide) another 10-12 years. PMs, oil, water, and food all will participate, none of which will be reflected in the CPI numbers...

 

[Lobotomy Boy]

Pardon my brainfart, but I can't figure out what PMs are. The above is a very thought-provoking post, but I need all the info to grasp it in its entirety.

Thanks, and again, sorry for being so dim-witted.

 

[ElTacoGrande]

The fundamental physics of it is that the mass defect curve has a minimum of the energy per nucleon at Fe (iron). Thus fusion and fission naturally move towards iron, but from opposite directions of atomic mass. In the extreme, if everything turns into iron, there would be no way to extract further energy by either scheme.

My understanding of the breeder reactors is that they improve the efficiency of the fission burn-up. However, fundamental physics above precludes renewability. By contrast, the renewability of wind, solar, or biofuel ultimately comes from fusion in the Sun, which albeit not infinite, would last us maybe another 5 billion years.

I'm sorry, CAnnoneer, my fellow Californian, I must correct your physics here.

Yes, Fe is the most stable nucleus. Eventually the entire universe will consist of iron nuclei. That is correct. But the fusion you have to do to turn two carbon atoms (or whatever) into Fe can only occur under the conditions present in brown dwarf stars or whatever. That type of fusion will never be used here on Earth, except maybe in a particle accelerator. There are really only two fusion reactions that could be usable for energy: D-T and He3-He3. Of the two, D-T is a lot more practical. Fusion reactors are going to run on D-T, if they ever run at all. Fission reactors can run on Uranium, Plutonium or Thorium.

So the question is, are we going to run out of fission fuels? The answer is no. We have so many tons of uranium on Earth. Uranium can be bred into plutonium, so we could have millions of tons of plutonium if we wanted to. And we have three times as much thorium as uranium. Of course everything in the universe is limited, but given the readily available suplies (and breeder reactors, a technology which has been around for a long time) we have enough supplies for MILLIONS of years. Uranium can be extracted by the ton from seawater. It's present in coal and in granite. And of course there are millions of tons of high-grade uranium ore to be mined. The earth's core has plentiful uranium. Millions of years from now we will be so different (technologically and biologically) from what we are today that it isn't even worth worrying about or thinking about. We'll either be off cruising around the galaxy, or we'll be extinct, one of the two.

Fission could power our planet into the far distant future, for a million years or more. That is beyond doubt or scientific question.

Fusion has even more possibilities. Deutrium occurs naturally in tiny quantities. Tritium doesn't occur naturally at all. We would need to start breeding both of them from water to get enough. That could certainly be done, because D-T fusion puts off plenty of neutrons. He-3, if we want to use it, can be found on the moon in large quantities, but that seems far-fetched, and it's more difficult to get He-3 to fuse than it is to get D-T to work.

But in any case, whether we use fission or fusion, we have on hand MILLIONS of years of fuel for both them, and both are available using present technologies and methods. The only question mark is when / if fusion will ever be a practical power source. But if it never is, fission is solidly proven, efficient and cost-effective and has nearly unlimited energy supplies.

When you're talking in the millions of years, well, who knows what will happen to our sun and our planet a billion years from now? If the sun increases in diameter, or starts increasing its output by even a few percent, the earth might become uninhabitable. If we are to survive billions of years from now we need to colonize other planets.

 

[Malone LaVeigh]

Pardon my brainfart, but I can't figure out what PMs are. The above is a very thought-provoking post, but I need all the info to grasp it in its entirety.

Thanks, and again, sorry for being so dim-witted.

Took me a while, too, but I think he means "precious metals." And I agree, it was a good post.

 

[Art Eatman]

Yeah, PM = gold and silver. And platinum and possibly palladium as a "sleeper" investiment. Palladium is a catalyst in a process for making gasoline directly from natural gas. (e.g., Shell, in Indonesia.)

Companies which sell cement and iron to China, plus food producers like Bunge in Brazil.

Use the profits off these sorts of investments to buy that high-priced gasoline and more ammo.

Anybody who can make a good profit on their house, oughta sell and take up renting...

, Art

 

[gc70]

Anybody who can make a good profit on their house, oughta sell and take up renting...

An excellent idea, except far too many homeowners owe the full appraised (often inflated) value of their house through a combinatin of first and second mortgages and home equity lines of credit. When this housing bubble bursts, many people will not have the "equity cushion" that has acted as a shock absorber in prior downturns.

 

[Lobotomy Boy]

When (not if, I'm afraid) the fecal hammer comes swinging down, many people will be upside down on their houses, by a pretty good margin, if the bubble is even as bad as the condo bubble in the 1980sand early 1990s.

If this combined with a drastic increase in energy prices and a serious drop in the value of the dollar and the new bankruptcy laws at just the right time, we could be in for a major character building experience.

 

[Kodiaz]

I'm glad I'm not the only one wondering/worrying why they are going to stop releasing the M3 reports.


An economic failure is gun related because if we have one we are going to be very happy we have guns.

Look at Argentina

 

[gc70]

If this combined with a drastic increase in energy prices and a serious drop in the value of the dollar and the new bankruptcy laws at just the right time, we could be in for a major character building experience.

You forgot the new, more-demanding rules on credit card payments.

 

[Waitone]

The only sure fired winner in a war is the banker.

 

[Art Eatman]

Not even the bankers, Waitone. At least not all the smaller ones. E.g., in south Florida, in Miami and Palm Beach, there are a lot of loans for dying condo projects.

Art

 

[antarti]

explanation

Pardon my brainfart, but I can't figure out what PMs are.

Sorry about that, PM=precious metals. Although copper (after a long bear market) is now making its own run. Energy and PM plays are all I have owned for a while.

Energy since Bush became Pres.

PMs make more sense than ever now, because Bernanke never saw a printing press he didn't like. Bernanke's been playing pocket-pool looking at all the cool machinery for years while Greenspan held the reins, now he's gonna get his hands out of his pockets and throw the levers himself. Look for big things soon.

Edit to add: Bernnke can even have the State Dept blame it all on North Korea, lol. http://www.newsday.com/news/nationworld/world/wire/sns-ap-nkorea-us,0,1537683.story?coll=sns-ap-world-headlines

The next 90 days are going to be interesting, IMO.

 

[U.S.SFC_RET]

Can you say thank you Democrats for stopping oil production off the west coast
of California?

 

[ElTacoGrande]

Can you say thank you Democrats for stopping oil production off the west coast
of California?

Thank you, Democrats, for stopping oil production off the coast of CA.

None of that would make any difference on the price of oil. Neither would drilling in ANWAR. There is an upward curve to the price of oil. Drilling in ANWAR and drilling off the beaches of SoCal might shift that curve forward by about a month or whatever. It will make effectively no difference, except that it would be ruinous to the tourist economy of California and would jeopardize our fishing, too, if we had drilling.

Drilling into little puddles of oil here and there will do nothing for us, and it makes no sense to risk beautiful areas like SoCal and ecological gems like ANWAR over a few drops of oil.

The solution is to stop using oil. There are so many alternatives. The biggest problem is that people have a PERCEPTION that we can't live without oil, when that is just not true.

I'm sure someone is thinking of responding to me, "you think you can live without oil, well, try driving to work without oil!" Ok, I would be delighted to. I would gladly switch to a biodiesel car, or an electric car, or a subway, or a bicycle if we would add some good bicycle lanes.

 

[publius]

Thank you, Democrats, for stopping oil production off the coast of CA.

It will make effectively no difference, except that it would be ruinous to the tourist economy of California and would jeopardize our fishing, too, if we had drilling.

More Drilling, More Fish

 

[Waitone]

Since we're thanking politicians for their contribution to our vulnerability someone's gotta than Lil' Brudder Bush in Florida. He too sponsored legislation making offshore drilling a no-no.

 

[R.H. Lee]

I've been hearing these imminent doom/gloom/crash prophesies since the 1970's. The latest favs seems to be based on excessive M3 growth and a housing bubble 'burst'. Sorry, I'm not buying in this time. That said™, Bernanke's first 6 months or so bear careful watching, and oil is an increasingly volatile commodity. Nontheless, the demand for both oil and housing will continue unabated. Shale oil will be developed when it becomes economically advantageous to do so, factoring in M3, inflation, the dollar's exchange rate and a dozen other variables. In other words, supplies stand ready to meet demand, and prices will adjust accordingly.

And, for the sake of argument, let's say the so-called housing 'bubble' bursts , causing a reduction of several trillion dollars in real estate values overnight. So what? Millions of people heretofore priced out of the market would suddenly qualify, and would buy, homes. Presto! Demand increases and prices begin to rise again. You still continue to live in your home and you haven't lost anything except fictitious 'appreciation'. The small percentage of homeowners who bought at the top of the market might walk away from their mortages, but that would be only a small dent in the overall economy.

 

[Sinsaba]

I'm confused...

I read the first page of this thread and the last page of this thread... nothing about guns.

 

[antarti]

And, for the sake of argument, let's say the so-called housing 'bubble' bursts , causing a reduction of several trillion dollars in real estate values overnight. So what? Millions of people heretofore priced out of the market would suddenly qualify, and would buy, homes. Presto! Demand increases and prices begin to rise again. You still continue to live in your home and you haven't lost anything except fictitious 'appreciation'. The small percentage of homeowners who bought at the top of the market might walk away from their mortages, but that would be only a small dent in the overall economy.

The bubble in stocks ended, money flowed out, stock prices started a correction. People lost investment dollars. Speculation in such a liquid market means that corrections happen more quickly than recovery. Few lost homes.


The bubble in RE ends, money flows out, market prices start to correct. People lose places to live (lots of ARMs out there, as many as 50% of all loans recently), and interest rates are rising. Speculation in such an illiquid market (homes take time and resources to build, lenders and landlords lose when there is a glut, and may not be able to afford keeping or selling) means that corrections take longer. Many will walk away (esp those in CA which have special legal protection if they do so) from mortgages and look for alternate housing (rentals, downsized homes, living with other family, etc). This will happen in a rising interest rate scenario, which means that larger down payments will be rewarded or demanded, and the barriers to qualification will also be higher, due to previous bad loans. At the same time, we have an average negative savings rate in the country. Where is all the money that left stocks and went into housing now? It's largely in Chinese owned debt.

Sounds like a perfect storm to me, anyway.

I read the first page of this thread and the last page of this thread... nothing about guns.

I reccomend NIB guns as an investment (strategic hedge against inflation).

 

[farscott]

If history is any indicator, firearms are not great investments. In fact, with a few notable exceptions, firearms do not appreciate at the rate of inflation.

As for the housing bubble, it seems very localized. Tampa, Las Vegas, Detroit, and southern California look "bubbly" whereas much of the rest of the country looks just fine. I can even see a scenario where high oil prices help create mini real estate booms as people attempt to live closer to work or employers move closer to employees.

My concern is more long term. As we finish transistioning from a manufacturing economy to a services economy, I am concerned that the job market for the next generation will not be there. No jobs is a recipe for domestic disaster.

 

[Waitone]

Adam Smith speculated there were three ways to create weath: dig it out of the ground, grow it out of the ground, or make it.

We marvel at the transition from manufacturing to services right until for foreign debt holders begin to complain the balance between imports and exports is waaay outta whack.

Yea, the perfect storm is an apt anology.

 

[Lobotomy Boy]

I reccomend NIB guns as an investment (strategic hedge against inflation).

If history is any indicator, firearms are not great investments. In fact, with a few notable exceptions, firearms do not appreciate at the rate of inflation.

I don't think buying guns is that bad an idea, though the amount of money you can invest in guns is somewhat limited.

I make my living in the publishing industry, in the genre of transportation. Right now we are seeing a tremendous spike in the value of collectible cars (particularly muscle cars), one that more or less matches the increased interest in investment in precious metals (PMs to those more well-versed than me ). I think the driving force is the same for both collector cars and PMs: invest in something that has intrinsic rather than theoretic value. Think gold versus government bonds. PMs, cars, and even guns have intrinsic value, and unlike real estate, all are portable and independent on a stable nation state to support their value.

While guns probably won't appreciate at the rate of inflation if we see a drastic devaluation of our currency, they will come in handy for killing supper.

 

[R.H. Lee]

Sounds like a perfect storm to me, anyway.

feh. Speculators in anything are always at risk. When several trillion dollars evaporated from the stock market back in 2000, many people hardly noticed and life went on. The big picture is that demand for neither housing nor oil is gonna decrease anytime soon, be there a 'burst bubble' or $200/ barrel prices. Supply will rise to meet demand and prices will adjust accordingly.

 

[publius]

I read the first page of this thread and the last page of this thread... nothing about guns.

Well, ya see, housing starts, interest rates, commodities prices, the money supply, the unemployment rate, etc, all are things which affect our ability to live a safe lifestyle. Like guns. You know?

 

[Malone LaVeigh]

If history is any indicator, firearms are not great investments. In fact, with a few notable exceptions, firearms do not appreciate at the rate of inflation.

Friends, NOTHING is going to appreciate at the rate of the inflation that might be not far up the road. That's the point, to have a little nest egg in the form of something other than cash-type assets.