silver train leaving the station?

[metalman]

Re: Peak cheap oil....

Well...since you asked, true peak oil itself occurred in 1853 when the first commercial oil well was drilled. We've been draining the worlds tank ever since and usage has increased nearly every year since but those two facts alone would have never made you a penny and from an investment standpoint the concept 'cheap peak oil' is far to ambiguous to be traded. Just ask Jim Rodger and T Boone Pickens whom rode oil all the way up and down from $50 to $150 to $50 and made and lost a fortune. Timing is crucial. If you don't have timing your gambling.

really? here's ej's pco chart/forecast from May 2008...



here's what went down...



look darn trade able to me.

Right now most traders are working under the assumption that the BRIC nations will only continue to use more oil. This model doesn't conform with the U.S. hyper inflation theory. A weaker dollar will destroy their exports and impede growth in these nations. It will also destroy oil consumption here as limited wealth will require consumers to start using fossil fuels like the irreplaceable gift they are.

here's an opposing view...

'For a dictatorship running an oil producing country, the more oil you consume at home to pay off your opposition, the less oil you have for export, the higher oil prices go even when you are operating at maximum production, the more power domestic and international political [power] you have. The West's backing of dictators worked before the Peak Cheap Oil era, but the global oligarchy has a narrow window of opportunity to get them out of power before the Peak Cheap Oil Producer/Consumer Feedback Loop makes them too powerful to manage. '

http://www.itulip.com/forums/showthr...g-Eric-Janszen

Before this happens I still expect a further rally in metals and fuels as easy money (hence growth) is still flooding the system. Even stocks continue to act very bullish. I went long at 7000 on the DOW and my number one pick then was Ford at $2 (no longer a good investment at these prices).

thx. when do you plan to get out? why?

[metalman]

Re: silver train leaving the station?

...this period of denial...

so much denial, so little time... which denial are you referring to? denial about the realness of the phony 'recovery' or the about the viability of the busted monetary system?

[cpnscarlet]

Re: silver train leaving the station?

Must be something really important going on here...

Did anyone else notice that CNBC pulled the silver price from the rolling ticker on their standard (non-HD) service. Blythe must have called the WH and Bammy called NBC...."Sheep, you don't need to see that silver price, you might want to buy some."

[LargoWinch]

Re: silver train leaving the station?

Must be something really important going on here...

Did anyone else notice that CNBC pulled the silver price from the rolling ticker on their standard (non-HD) service. Blythe must have called the WH and Bammy called NBC...."Sheep, you don't need to see that silver price, you might want to buy some."

It will be interesting to see what Blythe & Co. will do when people lines up outside buildings to buy physical silver during stage 3.

I bet it will be a bit harder to hide from view, but unfortunately it will be too late for the sheeple.

[jpetr48]

Re: silver train leaving the station?

Both. Though from more and more interviews with business executives, I think more Joe six pack americans are starting to be aware of the collapse of the dollar. Guess you don't have to be a rocket scientist to figure we have problems when China and Russia start cutting back room deals.

What does surprise me is how many think the economy is improving. This gets to EJs post earlier today on how our beliefs are shaped by self serving groups.

[LargoWinch]

Re: silver train leaving the station?

Both though I think more Joe six pack americans are starting to be aware of the collapse of the dollar.

Indeed, as they do need to eat and some even buy gas once in a while for work.

[dropthatcash]

Re: Peak cheap oil....

One thing that has concerned me is that many emerging markets (due to cheap labor) can produce products far below what developed nations can.

If an emerging market can produce a widget for X$, and it takes the U.S. 2X$ or 3X$, you have to devalue the $ an awful lot before you put a dent in their exports and improve your own. In fact, not only will you be creating inflation for products at home, you'll be importing inflation as prices of imports rise, but still remain below the cost of production here. It seems to me that if China were to actually bow to the pressure to rapidly raise the Yuan, we might see a POOM effect until prices finally rose enough where our widgets would be competitive with theirs.

Inflation is heating up in these countries, wages are rising. Even a modest (by third world standards) rate of 9%, doubles wages in 8 years. Were also not considering a collapse in China/India as these nations have bloated corrupt governments. I doubt even one of the banks are being run on the up and up and a stumble will cause a cascade of bankruptcy's. Consider too, that 3 trillion in treasury's only buys enough food to feed China for a year. We complain about our lousy politicians but a lot of these guys in China and India would make Genghis khan blush.

I remember counciling euphoric friends in the late 1990's bull market. They'd bought the line "I'm invested for the long term cause prices always go up". I'd point out that shares in GM hit an all time high in 1955 and never exceeded that price again (real dollars) (Now of course that GM doesn't even exist and those shares are worthless). GM must have been a "no brainer buy" to our 1955 investing equals and any argument against it as an investment must have been something like this;

"We just crushed Germany and Japan!, We're the mightiest nation the world has ever seen. We have a huge baby boom that will all need cars, quality is at an all time high and GM's the biggest company and eating the competition up in the world and your suggesting it might not be the best investment ever?!? Who's the competition? Flattened Germany and Japan HawHawHaw, "

[dropthatcash]

Re: The Comming Great Depression...So funny I could cry.

really? here's ej's pco chart/forecast from May 2008...



here's what went down...



look darn trade able to me.

Trade-able of course but your stance seems decidedly biased to the long side. As I posted yesterday, Short term I still see positive action in metals and energies but this will eventually collapse as all trees eventually return to the ground. The posted chart is meaningless as it's priced in a floating rate currency. An inflation adjusted chart will show you that oil has spend more years declining than advancing. Any argument for oil here could have easily been made in 1979 when reserves were projected to expire in 30 years, OPEC has a stranglehold on the market and the U.S. was predicted to collapse in bankruptcy. (Trust me, I lived it and even bought Douglas M. Cassey's; "The Coming Great Depression" in 1980 at age 19). Had you bought oil then you'd have watched oil decline for 20 years eventually hiting a 50 year low!!! Something that nobody could have conceived of at the time. I'm simply pointing out that every trade/investment/dog track tip has two equally valid arguments for and against it. Being biased to only one side of the market is a sure means to failure. Just ask Mr. Cassey still slinging his depression crap. Even if he's eventually right, you'd have waited half a life time and missed about a zillion chances to make good investments along the way.

[LargoWinch]

Re: Peak cheap oil....

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Your attachment/link is not working dropthatcash.

[LargoWinch]

Re: Peak cheap oil....

Inflation is heating up in these countries, wages are rising. Even a modest (by third world standards) rate of 9%, doubles wages in 8 years. Were also not considering a collapse in China/India as these nations have bloated corrupt governments. I doubt even one of the banks are being run on the up and up and a stumble will cause a cascade of bankruptcy's. Consider too, that 3 trillion in treasury's only buys enough food to feed China for a year. We complain about our lousy politicians but a lot of these guys in China and India would make Genghis khan blush.

I remember counciling euphoric friends in the late 1990's bull market. They'd bought the line "I'm invested for the long term cause prices always go up". I'd point out that shares in GM hit an all time high in 1955 and never exceeded that price again (real dollars) (Now of course that GM doesn't even exist and those shares are worthless). GM must have been a "no brainer buy" to our 1955 investing equals and any argument against it as an investment must have been something like this;

"We just crushed Germany and Japan!, We're the mightiest nation the world has ever seen. We have a huge baby boom that will all need cars, quality is at an all time high and GM's the biggest company and eating the competition up in the world and your suggesting it might not be the best investment ever?!? Who's the competition? Flattened Germany and Japan HawHawHaw, "

dropthatcash, I have been following some of your recent posts; well put and pretty good!

Please allow me to ask you, why the now sudden iTulip activity despite joining in 2008?

[metalman]

Re: The Comming Great Depression...So funny I could cry.

Trade-able of course but your stance seems decidedly biased to the long side. As I posted yesterday, Short term I still see positive action in metals and energies but this will eventually collapse as all trees eventually return to the ground. The posted chart is meaningless as it's priced in a floating rate currency. An inflation adjusted chart will show you that oil has spend more years declining than advancing. Any argument for oil here could have easily been made in 1979 when reserves were projected to expire in 30 years, OPEC has a stranglehold on the market and the U.S. was predicted to collapse in bankruptcy. (Trust me, I lived it and even bought Douglas M. Cassey's; "The Coming Great Depression" in 1980 at age 19). Had you bought oil then you'd have watched oil decline for 20 years eventually hiting a 50 year low!!! Something that nobody could have conceived of at the time. I'm simply pointing out that every trade/investment/dog track tip has two equally valid arguments for and against it. Being biased to only one side of the market is a sure means to failure. Just ask Mr. Cassey still slinging his depression crap. Even if he's eventually right, you'd have waited half a life time and missed about a zillion chances to make good investments along the way.

i shoulda said explained the charts... #1 from ej's report may 2008 when oil 130? or so... shows it plunging & rising again... #2 is from feb 2011 shows it plunging & rising again... the actual chart... google peak cheep oil cycle for details.

you a covering doomer? welcome to the tulip!

[c1ue]

Re: Peak cheap oil....

One thing that has concerned me is that many emerging markets (due to cheap labor) can produce products far below what developed nations can.

If an emerging market can produce a widget for X$, and it takes the U.S. 2X$ or 3X$, you have to devalue the $ an awful lot before you put a dent in their exports and improve your own. In fact, not only will you be creating inflation for products at home, you'll be importing inflation as prices of imports rise, but still remain below the cost of production here. It seems to me that if China were to actually bow to the pressure to rapidly raise the Yuan, we might see a POOM effect until prices finally rose enough where our widgets would be competitive with theirs.

The problem with this concept is that every item you mention there is relative.

Let's say the US devalues by 100% (1/2). What is to keep China from doing the same as it has been all this time?

Ultimately the average Chinese can and does live on far less than the American - just cutting the American's real wages in half doesn't help much, especially since said American is buying most of his stuff from the Chinese.

And don't forget, the devaluation by half equally cuts American savings in half. This doesn't matter if you own the Capital - as in the rent producing land/factory/IP or whatever - but it does f*** every other American (the 99%).

Let's not take out eyes off the ball: the choice we have isn't inflation or deflation.

The fork in the road is between $6 trillion in overseas cash being repudiated and flooding back all at once (i.e. loss of dollar reserve currency status) or shortages in the US for gasoline, food, and consumer goods.

[dropthatcash]

Re: Peak cheap oil....

The problem with this concept is that every item you mention there is relative.

Let's say the US devalues by 100% (1/2). What is to keep China from doing the same as it has been all this time?

Ultimately the average Chinese can and does live on far less than the American - just cutting the American's real wages in half doesn't help much, especially since said American is buying most of his stuff from the Chinese.

And don't forget, the devaluation by half equally cuts American savings in half. This doesn't matter if you own the Capital - as in the rent producing land/factory/IP or whatever - but it does f*** every other American (the 99%).

Let's not take out eyes off the ball: the choice we have isn't inflation or deflation.

The fork in the road is between $6 trillion in overseas cash being repudiated and flooding back all at once (i.e. loss of dollar reserve currency status) or shortages in the US for gasoline, food, and consumer goods.

I understand the points, but consider the counter arguments. All you wrote is well disseminated and fully reflected in the market. You, I and about a billion other players out their have all acted on these concepts, hence it should be the least rewarding outcome. It's much like betting on an inside tip that everyone knows about. The odds reflect the knowledge and the payoff has a high chance of being net negative.

Here's some concepts that may not be reflected in the market place. Most of these goods are significantly inferior to what industrialized nations are making. I've a large collection of broken items that failed withing the first year of production, even their damn thread seems to disintegrate in water and all made in China. As consumers become more in tuned to these unexpected replacement costs, they'll reject enough of the Chinese goods to cause more R&D as well as quality control costs to be incurred raising the price.

Cheap peasant labor is running out. I had a friend working in China on a U.S, project and he said 7 years ago trainloads of hungry peasants arrived in Peking every day. This isn't the case anymore, now wages are rising as factories compete of workers.

Most of the Chinese construction and infrastructure is very shoddy. Building shake like a leaf, concrete crumbles like sand, steel snaps like a twig, copper wiring so impure twice the gauge in required to carry the same current. These short-cut constructions goofs will incur a high maintanace cost as infrastructure wears out prematurly but the debt doesn't.

Most commodities are already pricing in a 70% haircut in the U.S. dollar. Should this actually happen, you may or may not get a panic spike to sell into but longer term they already have a lot and maybe to much catastrophe priced in. Note any long term chart and you'll notice these spikes are only 3 to 6 months in duration and it's all down hill their after.

Last but not least, I think Chinese investment advisers have already hedged the government reserves in anticipation of a collapsing dollar and If there's one thing I've learned, most "expert investment advisers", are not worth the diploma they received in their Cheerios box. If they've hedged and hedged poorly, an unwinding of these positions could flood the market with commodities, derivatives or god knows what they own.

[aaron]

Re: silver train leaving the station?

I had to sell my options at $33 dollar silver. The market was closed when silver hit $34.50. Basically, 30% of my profit!

Moral of the story: Even when you are right with a paper trade, you can still be wrong.

[jpetr48]

Re: silver train leaving the station?

Our own Finster who posts this forecast on market outlook blog has projected the decrease in PM today in his forecast.Looks like this could last awhile. We will have to wait and see.
BTW for those new- Finster does this not to direct investment strategy nor as someone who has all the answers rather as a service to itulipers.

http://users.zoominternet.net/~fwuth...MarketsOutlook