Excellent Commentary All .................................................................. Joab wrote.... Common Sense ..................................................... Amen .................................................... Supply and Demand is a correct statement..... It is exactly what the demand and supply are for is the question....and their relationship to other prices...... One cannot do this .....but think about it.... Back out the Iraq War and all middle east unease caused by Washington Bush Oil Admin & pals.... What would be the price of oil today ? Also....back out all leveraged commodity contracts and their marketplaces....leaving only the cash market.... What would be the price of oil today ? It is exactly .....common sense...... to know how the oil price has been affected....
Well common sense would tell you that it would return to the price it was BEFORE the war, when the natural forces were at work. BUT hey that would be too simple.
The first priority of any politician is to get elected. Period. It has to be. If you had a crystal ball and KNEW you could change everything for the better, you still would have to be a good politician and say things like "TAX THE OIL COMPANIES" b/c thats what layman (people who vote for you) want to hear. Unfortunately the skill set it takes to get elected aisnt at all like the one it takes to be a good leader, but that just how the system works. We hope to find someone who can do both (JFK). Anyways. Everyone wants to know if its supply & demand or speculators. Well I think its one thing: supply. We know its not the specs.just plain old common sense tells us that, and Buffet does a good job of explaining it so I dont have to. I don't think its demand either. We can get a pretty good picture of demand, we can count the cars and see how fast economies are growing. We know exactly how much oil is going to different countries. I think we would know if there was some huge spike in demand because we could see it pretty easily. I think demand is growing, but its not responsible for the insane spike we've seen lately. Supply however is very hard to know. Shit we don't even know how much WE have let alone middle eastern countries. When we ask we get different answers all the time. Its the only piece of the puzzle thats unaccounted for and unclear. So it makes sense that if there was a supply problem we would be left scratching our heads. Just my $0.02. Crazy thought. This is just ridiculous out of the ass talking, but what if 6 or 7 years ago the supply issue was discovered by our government. Some modern day 007 snuck into a Saudi office building and stole some documents that made clear the lack of supply of oil in the middle east. Ok I know thats melodramatic, but it sounds cool. Anyways what would our government do? They would understand that when oil starts to run out that we would have to take it by force, lest we be stuck with none or way high prices that we couldnt sustain. Our country simply can't handle $500 oil. So what do they do? They use any excuse they can to have an initial military presence in the middle east: WMD's, terrorists, etc because they know the american people would never get behind a purely financial based war, even if its in their best interest. So we go into iraq first b/c its the easiest sell. Next Iran, and so on until we guarantee our countries energy future. If that was the case Bush would be a damn hero. I know its kind of ridiculous, and I dont like conspiracy theories either, but hey you never know right? Its at least interesting to think about.
I do admire the guy for his common sense approach to investing. Basically what he tells everybody he talks to is.. there is no magic in investing, look for value, who cares what the market does today or tommorow. I have no idea what the market will do this year or next. I buy company's that have good product, income, and I understand. Simple. He is the ultimate turtle, slow, steady and boring. Of course you don't get rich overnight with his wisdom, you get rich eventually though.. if you can wait that long.
They would understand that when oil starts to run out that we would have to take it by force, lest we be stuck with none or way high prices that we couldnt sustain. Our country simply can't handle $500 oil. So what do they do? They use any excuse they can to have an initial military presence in the middle east: WMD's, terrorists, etc because they know the american people would never get behind a purely financial based war, even if its in their best interest. ------------------- I'll buy that theory, it's been bounced around before. We have to compte with China for oil, they need it for mfg we need it to drive to the mall. We get outbid ($500 oil). Iraq was an opportunity and we took it to establish ourselves in ME. We went to the ME during the first Bush and came back, how many times would we have to do this? Iraq is a staging area. Keep your enemies close. The world is PO'd at us? Wouldn't surprise me. We are where many countries would like to be, a military operation right in the middle of the oil.
I just thought about it while I was in shower, its cool that some other people have thought about it too. In my mind its not too far fetched.