Mr Chaos, not sure your a PhD (no offense)..... Under the Clinton administration the effect of China and India coming online (as we are often told) was evident then too, and prices and distribution of oil and oil based products were vastly more reasonable, almost a full $1.00 lower than where they are now. Nothing changed other than the skillful and manipulative representation of news and news related stories so that the intended outcome was higher, higher and yet again higher "at the pump" prices, which is what we have had under the Bush and Oil Administration. So, to reference the prior 12 month period as any reference is inappropriate. I chose those words so as to leave a more emotional response out of it, and have this discussion remain objective, as well as respectful to your participation and comments. I encourage others to do so too. Thanks for your posts and contributing.
similar arguements and issues of such a vast national proportion were faced by our parents during the 30's both with the depression and with the subsequent world war. it took firm and definitive national action and in the present absence of that then the burden of relief falls to the states. either way, the citizenry are being sqeuuzed and the net outcome, especially since they changed the bankruptcy laws will be complete collapse, not just regional or otherwise. watching dominos fall will be the least of one's concerns. OK, here's an overly simplistic rendition: personal collapse and bankruptcy, but no debt relief because the persons are employed and the workout payments will be based upon their present salaries municipal and local / regional corporate collapse and wholesale unemployment through layoffs as well as well as firings prior bankruptcy arrangements go unfulfilled due to no longer having the previously expected income, hence tax loss selling occurs for homeowners and evictions in masse for non-homeowners state and regional tax revenues fall and state budgets collapse, hence services collapse regional and localized collapse begets more of the same and we're back at depression level scenarios the cost of doing nothing is too expensive open "alternative" discussions need to take on greater significance that they do presently
i cant stop laughing when I see these posts. Obviously, your pointing out the white elephant that no one wants to see, especially "free market" Republicans. Oddly, when USD weakness, Oil goes up and vice versa. However, strength of a currency would have nothing to do with oil prices right? One point of interest, you know the economy is going bad when you hear ppl on the news start talking about "budget deficits". Why? Because we run them all the time and normally no one cares, they only care when things are going bad for them, which then they say "the reason things are hard is because of these deficits" (ie they are feeling pain). So I think you might find a proxy in a judging receptiveness to your ideas when you hear more media talk about budget deficits. Lastly, the only ppl who pay higher prices at the pump are those without investible assets, since those with are hedged by buying XOM, or having investments that appreciate to offset the increasing costs (ie in other commodities, etc etc). The country has clearly stated it doesn't care about its lower/lower-middle class.. alas look at "illegal immigration", which is somehow now something that we need to legalize? The reality is we're throwing out the lower middle class/lower class and the upper/upper-middle class will be ok, so don't worry about it "The strong did what they could, the weak suffered as the must" -- Roman Warrior lol
http://www.nytimes.com/2006/01/30/b...c83a7f4025b22b&ei=5088&partner=rssnyt&emc=rss According to the above NYT article, Exxon-Mobile's 2005 profits were $36.13 billion on revenue $371 billion. That's a 9.7% profit margin, which is healthy but by no stretch of the imagination "collusion, extortion or price gouging." You may not like it, but it just isn't. The banking, telecom, software and food and beverage industries average higher profit margins than oil and gas companies. Unlike those those other industries, the oil industry must invest massive capital expenditures to keep the oil flowing. We're talking on the order of $10B per company annually for exploration, pumping, piping and refining infrastructure. And the EROI (Energy Returned on Energy Invested) of oil is dropping, which basically means it takes more energy (=$) to get the stuff out of remote places like the deep sea, which is where we get an increasing % of our crude. Wanna talk tar sands? Even more energy and capital-intensive. Bottom line: no free lunch. And now they're saying global oil production is set to 'peak' because new finds aren't replacing the old ones. In that case, you can bet prices will skyrocket and the only collusion here will be too many people demanding too few barrels.
I actually do have a PhD. What is the issue exactly? When China and India have a 6-10% growth rate, the six/eight years between Clinton's time and now can be significant in demand. And take out half of Iraq's oil production as well, and add in the petroleum consumed by a large deployed military. The six/eight years have also shown reduction in production in increasingly mature fields (North Sea, Norway, Alaska, Gulf of Mexico) despite application of serious technology. (i.e. oil fields individually peaking). Russia's oil fields are getting old as well---there was a big bump in production when more modern oil extraction techniques replaced the USSR style ones in early-mid 90's, and Russia's domestic economy sucked so its local consumption was smaller. Now the easy gains are gone and new extra Russian production isn't happening and their domestic economy is reviving significantly along with local consumption. Mideast states are consuming more locally as well due to exploding population. Oil price is determined by the marginal price---it's like sucking coca cola from the can. It's just about as easy to get some from the top as when it's almost depleted, but then its much harder all of a sudden. If you have oil consumption at 80 mbpd and Saudi slack of 3 mbpd you can easily maintain flat prices. If consumption/demand goes up to 84-85 and Saudis are running flat out (as they apparently are now), prices can suddently rise. This is well known phenomenon in the oil business. I'm sure some people are trying to take advantage of the situation due to various schemes, but it's not entirely possible to do so with market manipulations (oil futures are settled with physical delivery so the oil has to go somewhere that's pretty visible).
I believe that now all of the members of the Chinese Central Committee have degrees in science or engineering. What fraction of the top actual policy makers in the USA are similarly educated? What fraction of the same group worked in the oil business? Phenomena of economics never win over the laws of physics. The recto-craniallly inverted don't worry be happy economist parrots claim that "economics will take care of everything! don't worry, don't actually do anything, especially if you're the government! The market will do everything for you by magic. No work, no thought, no planning necessary! It's evil, in fact!" Well here people are are looking at the market signals, and the market signals *are* telling us to "do something about it, now!" (look at the unprecedented long term contango and secular rise on long term prices in the crude futures) And yet the response too often is, "Hey shut up. The market will let us know!" Hello, McFly? The market can in fact take care of things just fine by inducing a huge depression in the stupid countries and rewarding the ones who did something about it ahead of time, well aware of the laws of physics and empirical geological facts, get wealthy.
thank you for your comments and confirmation of the thesis of this arguement.... I believe in the overall, the tone of the comments both (somewhat) agree with the thesis as well as confirm the need to defensively push some agenda so that something more is done to address these cripling shortages and prices....
I will call you Doctor Ph.D., from now on.... (hope I didn't offend you previously) The issue was to do exactly what we're doing and essentially kick the ball back and forth until enough players on the sidelines realize, hey, those guys got a game going on, let's go see if we can play too.... scenario. In short, present some discussion from the defensive perspective regarding all that has occurred. you brought out some very good points regarding the shortening of supplies due to Iraq and Iran and a few other locations (Nigeria, North Sea and other places) wavering in their production of oil and at the same time having Armies in Action, and the higher demands that they place upon immediate availability of petroleum... --------- you made some excellent points regarding those who suggest that somehow the "marketplace and commerce" will magically balance out supplies versus demands.... that theory remains just that, rarely proven and just a theory. Practice shows that more laws and other social concerns must be used to bring those two forces together and control commerce.... This seems just opposite to the Kudlow & Cramer on CNBC, and now just the Kudlow Show on CNBC and his constant political spinning of financial news and events, as if somehow to force down the throats of the American people some higher degree of satisfaction other than the actual facts of how poor and miserable our financial state has become. ------ overall, Dr. Chaos, I believe your comments have found agreement with the overall thesis of this discussion thread, namely that there are things that can be done.... that we don't have to blindly keep taking it, as it has been shoved down our collective throats (figuratively) that there are actions that can be done to better position ourselves to the realities that we're no longer the largest consumer of oil and oil based products in the world I believe that is the point and the objective of this discussion thread. Thanks for validating it with your comments and time and participation....
The solution is carbohydrate economy . http://www.prospect.org/web/page.ww?section=root&name=ViewPrint&articleId=11313