[Jorma]

I am not going to stick my head up and make any predictions on this. Surely I'm an oil market dilettante.

I do know what the party line is comming from the adminstration. That is that Iraqi oil will be soon available after our attack. Enough so to lower crude prices.

Intermediate term Iraqi oil production can be increased significantly and hurt OPEC. There is a simple idea about that the Bush's want nothing more than high oil prices to make their oil friends rich. I think this is dead wrong. The economic advantages of stable prices at a lower level are far better for everyone and they know it. Well, I think I know that. The assertion in the first paragraph is without question. Bill Seedman, GOP bigwig and former RTC chairman came back from a White House breifing last month and told the local paper that exact story. He said that the war was "bullinsh" for the economy because it would lower oil prices.

We will soon see. A mistake here short term would be catastrophic. Not only economically but politically for Bush. Any period of say $2 gas and the stool will hit the fan. Intermediate and longer term Auerback is probably closer to right.

What nobody is predicting is the Stoolie scenario. Significant economic slowing and a drop in demand. A sudden spike in price would in fact make this outcome far more likely.

[assteroid]

Yobob, Great link. I think the authors of the article pretty much nail it. I can't help but think that we're entering into a "highest bidder" economy. The war in Iraq, based on a model of "plentiful supply" doesn't make much sence. Viewed through this lens, it makes more sense.

[Whadda I Do Whadda I Do]

If the Mideast wants to move to a gold coin for stability in oil profits, how does this effect US oil based contracts (long term) that are based in US dollars. I mean doesn't everyone else in the world search, construct, extract, maintain, protect and R&D anything having to do with oil in the region while locals go to the bank?

[assteroid]

Jorma, Lower stable prices are "far better for everyone". Truer words were never spoken, and if we were dealing with the local chamber of commerce, you'd have a very valid point. Truth is ,we're dealing with pirates who are trying to gain complete control of diminishing resources...water, natural gas, oil. We'll be shiverin' our timbers trying to stay warm if home heating costs spike up too.

Look to the examples of Enron, and what happened to the electricity market, in California, for a model of the future. Granted, there may be some differences and many other factors to be weighed and considered. But natural resource pirates, won't necessarily act as part of a greater system, in a symbiosis that rewards seller and consumer. I don't expect "reasonable" business sense from resource thugs, anymore than I'd expect a pirate to do a cost benefit analysis of having an adversary keel hauled. They're in it for the short term. Make a killing, drain the resource, redirect and invest the money elsewhere.

Arguments about the symbiotic nature of business are based on the underlying assumption of an ongoing relationship. If oil is running out, those that control the product need not pursue this kind of relationship. They're in the catbird seat.

It's more a study for criminologists than economists is my take on it. But then, maybe I'm too cynical, and you're right, Jorma.

[Goldilocks]

"Their thinking is along these lines. Two years ago (and for the 10 years before), the dollars I got for one barrel of oil bought 1/2 oz of gold. Last year, 1/3 oz.. This year one barrel only gets 1/4 oz. of gold. I'd better raise the US dollar price of a barrel of oil by 100% to correct for this continuing devaluation of the US dollar."

- Thanks for that. An excellent way to view it.

[Hypertiger]

"major reduction of population" that's part of the plan, 6 billion need to die...

[DogBoy]

"Once we have Iraq, WE will be able to be our own swing producer in OPEC. Why? To keep BOTH oil AND gold in the range we want. "

Take a look at the charts of the S&P and Nazdaq and then tell me with straight face (no smirking please !) that this is a likely scenario.

I said it before and I'll say again and again that if the Neocon scenario happend in the middle east the Bear market will be over instantly.

It will be a still-born Bearz.

Since I know the Bear market has just started that tells me that some real fornicating bad shit is going to go down over there.

The charts and world trends tell me that there is not a snowballs chance in hell that the US just walks in and takes over the ME and all is well.

Peace on Earth and Low Oil Prices To all Men.

Not chance.

[DogBoy]

"assuming the US is successful in defeating Saddam Hussein"

This is a major ASSumption. Note the word "ASS" in Assumption.

Any number of things could go seriously wrong and probably will.

I see the vast majority of people making this VERY assumption which tells me that something is AMISS here.

My "market nose" tells the DogBoy to take the other side of this bet since it's sooo heavily weighted on one side. I overhear in the office all the time tlking about how the Bull will be back WHEN we win in Iraq.

It all sounds sooo much like another war in a little place in SE Asia about 35 years ago. 50,000 body bags later and we were forced out in a humiliating defeat.

I don't recall such a hugely important event as the start of a war in the Middle East with so much assurredness and assumptions that all would go well.

Well see but for now Da DogBoy as he always does plays the role of the CONTRARIAN and takes the OTHER side of this bet GLADLY. And the more CONfident the majority become over a sure and quick victory the more the DogBoy sticks by his bet.

If folks started to act like nervous nellies the Dog would worry and not sleep well at all. But I don't see that at all.

The neat thing about it is that if DogBoy loses then the world will be at peace and the Bear market will be over.

In that case DogBoy just putz his nose back on the grind stone and works and saves. The Dog loses a little but no big deal.

If the DogBoy wins the bet then he does a "clean sweep" on Misto Market and never has to trade again.

And no mo grind stone for the Dog.

Just relaxing massages from island babes and margaritas by the score as far as the eye can see.

Doc, is there a retirement home for old stoolies whove made their fortune ?

Tell me, what is it like ?

[Takachi]

AssMaster, I think you have it right on. In fact there are some who believe we have been paying a gold premium to the Middle East for some years. Price suppression of gold was a bargain made to reduce the price of oil to deprive the Russians of export earnings in the 80's. Today, the end around is targeted at the Saudis, the Iranians,, the Russians, and, for bonus points, the Chinese. This exercise is not to ensure cheap oil, its to ensure profitable oil.

There are lots of reasons to take out Saddam, but he has made himself the convenient target that justifies conquest, and to the victor belong the spoils.

[bubbadropping]

Listened to an article researching Iraqi oil on Pacifica radio the other day. Its not only the oil. Its also most importantly that Iraqi Oil is considered 'easy access' or 'easy flow' oil. It border the ocean. Stick a pipe in the ground and hoover it up and right down to the waiting Exxon ships. Not so with Afghan oil, Russian oil and many other fields. For $1.25 a barrel you can harvest the stuff, then sell it for 25 dollars a barrel. This is double the profits of all the U.S. oil biggies in the first year. This is 40 billion the first year alone and literally trillions of dollars of profits thereafter. Why? It is now beleived that Iraqi oil fields may have as much as 400 billion barrels under the surface. The largest in the world. This whole thing is about seizing the reserves for the long run, meaning the control of the price of energy thru much of the 21st century. But make no mistake, the people that manuvered bush into office will make a killing off easy access. Also once Iraq is under U.S. military control, the next oil grab comes for Saudi Oil. These towel headed facists are going to have to deal soon with major political instability and to that end have been paying off Muslim fundamentalists in an effort to buy time. But when the edifice starts to crack, the U.S. military will step in, partition off the Eastern oil rich section of that Kitty Litter box to be ruled by a U.S. puppet and they will surrender Mecca and the rest of the sand to the fanatics. Score another victory for Yankee hegemony and ultimate control of energy supply and pricing.


















































4

[Hypertiger]

China and Russia are in a better position to wait out the collapse of the US... Unfortunately.

As soon as the Americans get close to the oil fields they will blow up along with the pipelines which will take 1-3 years to “fix”. The US had their chance in 1990 and blew it plain and simple.

It’s the end of the line, the oil fields are already set to blow right now and Saddam has his finger hovering over the button.

That is just the most likely scenario to fuk things up, there are others. There is no way any western soldiers will be allowed to pull their puds in the Arab world. Saddam is even passing out weapons to the Citizens of Iraq and I assure you Saddam is not going to walk out into the open (The last time the “real” Saddam was seen was 1998) so the only targets of opportunity will be US soldiers…

Iraq is one of the oldest civilizations on Earth and will not lay down and die, sheesh…

Eve of Destruction
The Eastern world, it is explodin',
Violence flarin', bullets loadin'.
You're old enough to kill, but not for votin',
You don't believe in war -- but what's that gun you're totin'?
An' even the Jordan river has bodies floatin'.
But you tell me, over and over and over again, my friend,
Ah, you don't believe we're on the eve of destruction.

Don't you understand what I'm tryin' to say,
An' can't you feel the fears I'm feelin' today?
If the button is pushed, there's no runnin' away,
There'll be no one to save, will the world in a grave.
Take a look around you, boy, it's bound to scare you, boy.
An' you tell me, over and over and over again, my friend,
Ah, you don't believe we're on the eve of destruction.

Yeak, my blood's so mad feels like coagulatin',
I'm sittin' here just contemplatin'.
I can't twist the truth, it knows no regulation,
Handful of senators don't pass legislation,
An' marches alone can't bring integration
When human respect is disintegratin',
This whole crazy world is just too frustratin'.
An' you tell me, over and over and over again, my friend,
Ah, you don't believe we're on the eve of destruction.

Think of all the hate there is in Red China,
Then take a look around to Selma, Alabama.
Ah, you may leave here for four days in space,
But when you return it's the same ol' place,
The poundin' of the drums, the pride an' disgrace.
You can bury your dead, but don't leave a trace.
Hate your next-door neighbor, but don't forget to say grace,
An' tell me, over and over and over again, my friend,
You don't believe we're on the eve of destruction,
No, no, you don't believe we're on the eve of destruction.

Barry McGuire

Selma, Alabama is probably not that bad anymore, so I guess there has been a little progress but too little too late…