Posted on 07/04/2008 7:34:39 AM PDT by kellynla
Without a doubt, crude oil is the most important commodity on our planet. Hypothetically if it vanished overnight, our entire modern world would collapse. No goods could move without the oil-derived transportation fuels, so virtually all trade would implode. Unlike nearly every other major commodity, there is just no economically-viable substitute for oil.
And the fundamentals driving oil’s secular bull are unparalleled in their strength. As Asia awakens and enters the modern era, global demand for oil is rising relentlessly. Despite today’s unprecedented prices, demand remains strong all over the world. And of course once oil is burned, it is gone forever.
But supply growth just can’t keep pace with demand growth. Finding big new oilfields has become exceedingly rare. You can count the major finds in the last several decades on your fingers! And the new oil that is found these days is almost always remote and extremely expensive to recover and bring to market.
Oil’s meteoric ascent has certainly reflected its ultra-bullish secular fundamentals. Between November 2001 and May 2008, it soared 666.3% higher! Granted, about half these gains in dollar terms were due to the Fed’s relentless fiat-currency inflation, but oil has still been a monster bull. It is amazing that this giant market has utterly dwarfed the bull-to-date gains of far-smaller and more-speculative commodities like silver.
But even though oil sports the most bullish secular fundamentals of any major commodity, it didn’t travel from $17 to $134 in a nice straight line. Like all bulls, oil has flowed and ebbed. Massive uplegs that drove widespread greed yielded to subsequent brutal corrections to rebalance sentiment. Heeding this ironclad characteristic of all secular bulls is more important today than ever.
(Excerpt) Read more at zealllc.com ...
Kinda coincides with Iran getting closer to becoming a nuke state. We are being defeated without a shot fired. Slow boil the frog until he’s cooked.
Hamilton is the best at taking these various commodity markets and dissecting them graphically. If anyone wants to get a feel for what’s going on in the global commodity markets I don’t think you could find a better source. He always steps back, takes a longer term or historical view of how these markets play out and then calmly analyzes the present conditions. If you were to rely on Zeal alone you would do very, very well.
We are in the middle of an economic war instigated by foreign governments. Their goal is to bring down America, make us weak, and then dominate us.
I doubt we even have the capability to react to a WW2 sized conflict since much of our steel, and other supplies are foreign sourced.
An economic blockade of valuable supplies is a serious strategic weakness. In WW2, Japanese siezure of SW Asian rubber supplies hindered our war effort. Hitler needed oil to fuel the German Army. That was his strategic weakness that ultimately brought down the 3rd Reich.
America has the same vulnerability. Oil is our lifeblood. Supplier nations know they can bring us down economically. They act like they are our friends. But what they are doing with pricing is just the same as firing a cannon at America.
And we spend billions of military dollars protecting their oil so they can sell it back to us. The Saudi’s and their OPEC friends are ungrateful. I say we need to charge several billion dollars a month for protection money.
I don’t agree with the main premise. Small nuclear reactos generating high pressure steam. Or, coal fired high pressure steam engines. That moved the goods and could/will do so again. Get out your thermodynamic books and look at the steam tables again.
I believe that the Russians showed us a small nuclear reactor that was about refrigerator size. Our response was not invented here. The routinely launched them into orbit. I suspect that one could move trucks with them.
Your exactly right. Its time we hand the Iraqis a bill for all we’ve spent so far and ask for an advance for any services rendered in the future.
The bill is being presented. We don’t get to see that stuff.
As far as that bill getting presented, first you have to foster a class of people with something to loose. That element hasn’t been in existence probably long enough to start presenting bills. But it’s getting close.
loose=lose.
I was thinking more on the terms of Saudi
Arabia and Kuwait as “owing” us for their protection and liberation after Gulf War 1. They sleep very comfortably knowing that half of all American Military might is within reach to do their bidding, in exchange for their oil.
We protected them from Iran and Iraq. Now that Iraq is stable, Iran is taking their oil profits and becoming a regional superpower. Iran would like nothing less than extending jihad to the overthrow of the royal Saud.
We are being bribed for protection because Kuwait and Saudi could just as easily sell their oil to China in exchange for chink military hardware.
Not to mention that we would just simply convert our coal into gasoline.
That’s coal gasification - a WWII-era technology... and we have some of the world’s largest coal reserves.
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