Beware oil's crash....

[Zoomie1980]

...We are not too far now from having the world's most critical commodity losing HALF it's value in less than three months! That is almost beyond belief. That dwarfs the stock market losses, or the housing bust.

Cause....speculators, again.....we are now seeing runaway, as yet uncovered short sales in oil. They may drive this market into the 30's before its done and along with it, all the emphasis on alternative fuel and conservation....gas will not just drop below $3 but well below $2 and closer to $1. Unbelievable....

 

[dilloduck]

...We are not too far now from having the world's most critical commodity losing HALF it's value in less than three months! That is almost beyond belief. That dwarfs the stock market losses, or the housing bust.

Cause....speculators, again.....we are now seeing runaway, as yet uncovered short sales in oil. They may drive this market into the 30's before its done and along with it, all the emphasis on alternative fuel and conservation....gas will not just drop below $3 but well below $2 and closer to $1. Unbelievable....

Not really---science has failed us numerous times. It just so happens to be the "great" economic minds this time. The math didn't work.

 

[DavidS]

...We are not too far now from having the world's most critical commodity losing HALF it's value in less than three months! That is almost beyond belief. That dwarfs the stock market losses, or the housing bust.

Cause....speculators, again.....we are now seeing runaway, as yet uncovered short sales in oil. They may drive this market into the 30's before its done and along with it, all the emphasis on alternative fuel and conservation....gas will not just drop below $3 but well below $2 and closer to $1. Unbelievable....

Isn't....that.....good?

 

[Article 15]

Isn't....that.....good?

...We are not too far now from having the world's most critical commodity losing HALF it's value in less than three months! That is almost beyond belief. That dwarfs the stock market losses, or the housing bust.

Cause....speculators, again.....we are now seeing runaway, as yet uncovered short sales in oil. They may drive this market into the 30's before its done and along with it, all the emphasis on alternative fuel and conservation....gas will not just drop below $3 but well below $2 and closer to $1. Unbelievable....

Emphasis mine.

I think the OP is concerned that if prices fall to where they were say 10 years ago then the idea of alternative affordable energy will be put on the back burner and all but forgotten ... until the next time.

 

[editec]

I the price of heating oil doesn't drop to a reasonable price I may not be around to enjoy alternative energy.

Let the price fall through the basement, says I.

 

[clane1987]

let it fall but still seek an alternative resource

 

[Paulie]

I disagree. I think when China finally stops debasing their currency, their oil demand is going to rise much higher, causing prices to climb.

Add to that, the fact that we are now starting to LITERALLY print money, as the Fed's got no more options left. We very well could see a perfect storm of inflated money supply, overseas Dollars being dumped, and China's currency strengthening, all of which will have no other affect than higher oil prices.

 

[Zoomie1980]

Isn't....that.....good?

No because that price may be as ridiculous as $140 oil. The trading price needs to always remain close to the REAL value of the commodity for market stability. Artificially low prices are as damaging as high ones.

 

[Toro]

Good stuff.

Falling oil prices will help the economy.

 

[Zoomie1980]

I disagree. I think when China finally stops debasing their currency, their oil demand is going to rise much higher, causing prices to climb.

Add to that, the fact that we are now starting to LITERALLY print money, as the Fed's got no more options left. We very well could see a perfect storm of inflated money supply, overseas Dollars being dumped, and China's currency strengthening, all of which will have no other affect than higher oil prices.

You and Brian both grossly overestimate Fed monetary policy to affect everything. It certainly can aggravate a situation, but it does not, and will never DRIVE a situation. The economy is far too large for the Fed to have anything other than a peripheral effect. The dollar is surging IN SPITE of Fed policy that should do just the opposite. Oil is tanking as is most other commodities IN SPITE of the Fed policies that should be having an opposite effect. It now appears that most massive Fed action in history is not much more than spitting in the wind of the forces effecting the market.

I'm not going to say the Fed and central government fiscal policy doesn't matter, but that it simply doesn't matter THAT MUCH. Other forces far more than outweigh what the Fed can effect. About all the Fed can do is perform surgical strikes into the few areas it can have a positive effect.

 

[Zoomie1980]

Good stuff.

Falling oil prices will help the economy.

I think oil getting down into the 50's would be good because at that level it is in the neighborhood of its real value. And at that level gas would be around $2.00 gallon. A good thing. But $18 oil is as dangerous as $140 oil.

 

[Paulie]

You and Brian both grossly overestimate Fed monetary policy to affect everything. It certainly can aggravate a situation, but it does not, and will never DRIVE a situation. The economy is far too large for the Fed to have anything other than a peripheral effect. The dollar is surging IN SPITE of Fed policy that should do just the opposite. Oil is tanking as is most other commodities IN SPITE of the Fed policies that should be having an opposite effect. It now appears that most massive Fed action in history is not much more than spitting in the wind of the forces effecting the market.

I'm not going to say the Fed and central government fiscal policy doesn't matter, but that it simply doesn't matter THAT MUCH. Other forces far more than outweigh what the Fed can effect. About all the Fed can do is perform surgical strikes into the few areas it can have a positive effect.

I suppose we can just agree to disagree, Zoomie. I suspect you haven't studied the Fed, along with our economic history very much, in which case I wouldn't expect you to lend it much credence. I don't think you quite understand how much you affect an economy by controlling credit and the money supply. I'm not sure why, either, considering it's at the heart of macroeconomics.

 

[DavidS]

No because that price may be as ridiculous as $140 oil. The trading price needs to always remain close to the REAL value of the commodity for market stability. Artificially low prices are as damaging as high ones.

Damaging....how? $1 per gallon gas is not damaging to anyone except the Saudis and the multi-billion dollar CEOs of oil companies. I think Bush and Cheney would lose a buncha money too... all of this I have ZERO problem with. Maybe they invested in Lehman Brothers.

 

[editec]

I expect to see the price of oil fall further.

Stock markets around the world are crappying out, National Banks round the world are now infusing cash into their banking systems, too.

The value of the stock market has dropped 12% in the last two weeks.

Americans lost 2 TRILLION dollars in their retirement accounts in the last two weeks

How can the price of oil NOT drop if the world is going into a depression?

 

[Paulie]

I expect to see the price of oil fall further.

Stock markets around the world are crappying out, National Banks round the world are now infusing cash into their banking systems, too.

The value of the stock market has dropped 12% in the last two weeks.

Americans lost 2 TRILLION dollars in their retirement accounts in the last two weeks

How can the price of oil NOT drop if the world is going into a depression?

Other central banks are debasing their currencies in lock step with us for no other reason than to prop up the Dollar. When that isn't economically feasible for them any longer, they will raise rates, which they SHOULD. They're ruining their currencies for us. When they stop doing so, and the Dollar starts to drop like it OUGHT to be doing right now, oil will go up.

And this is to say NOTHING about the possibilities of US Dollars overseas being dumped. There are a plethora of reasons why oil could come up.

 

[Zoomie1980]

I expect to see the price of oil fall further.

Stock markets around the world are crappying out, National Banks round the world are now infusing cash into their banking systems, too.

The value of the stock market has dropped 12% in the last two weeks.

Americans lost 2 TRILLION dollars in their retirement accounts in the last two weeks

How can the price of oil NOT drop if the world is going into a depression?

The only people that lost money in their retirement accounts were people that actually sold them. If you did that, and didn't have to because you are actually living off of it, you are an absolutely IDIOT and DESERVE to have lost it. I'm about 12-15 years from retirement and rather than sell I have been BUYING for some time now, and with this recent crash I am buying at the highest rate I have ever done so. That 12% is 24% I will MAKE at some time.

 

[Zoomie1980]

Other central banks are debasing their currencies in lock step with us for no other reason than to prop up the Dollar. When that isn't economically feasible for them any longer, they will raise rates, which they SHOULD. They're ruining their currencies for us. When they stop doing so, and the Dollar starts to drop like it OUGHT to be doing right now, oil will go up.

And this is to say NOTHING about the possibilities of US Dollars overseas being dumped. There are a plethora of reasons why oil could come up.

Oil is going NOWHERE any time soon. It's going to crash further into the 60's and maybe even the 50's. It will be two years or more before oil returns to triple digits, probably a good deal longer. The dollar bottomed some time ago and will not bottom again for many many years now. The Fed has been utterly useless and their monetary policy is having NO effect, so far, on ANYTHING.

The economy is a phenomena all it's own, beyond the control of any central bank to effect in anything other than a fringe impact. In terms of the economy, national borders, currencies and sovereignty are meaningless.

 

[Zoomie1980]

I suppose we can just agree to disagree, Zoomie. I suspect you haven't studied the Fed, along with our economic history very much, in which case I wouldn't expect you to lend it much credence. I don't think you quite understand how much you affect an economy by controlling credit and the money supply. I'm not sure why, either, considering it's at the heart of macroeconomics.

Our economic history teaches me that today's global economy bears no resemblance to history. We are in a new age, where no one country can control it's own economy. National borders are IRRELEVANT and an individual central bank is close to being that way. Only a coordinated effort by the worlds major central banks is having any effect, and that is only very marginal, at best. Your adherence to historical norms is wrong headed. This is the 21st century, the age of instant information, instant market reaction and a level of interdependence and mongralization of national economies into a single GLOBAL economy, now. The US no longer controls it's own economic destiny and has not for a quite some time now. That's just reality.

I remember last summer when oil was at $135 or so and I was saying it was probably close to it's peak and would soon crash into the 70's!. You were among those claiming it was headed much higher because of Fed action causing weakening dollar. I was right, and today it closed at $77. Hmmm... Why was I right? I sensed a fundamental shift in market on the demand side, led by people dumping their SUVs, and a slowing economy, world wide. Had NOTHING to do with the FED.

And now? I sense yet another fundamental shift in the marketplace, this time in equities. I simply "feel" that the market is sensing the bottom. Again, has NOTHING to do with the FED, which I am convinced is approaching irrelevancy in terms the the GLOBAL economy. The panic is simply wearing out and the companies behind the market are still fundamentally sound....at least most of them....and we still like to buy stuff and over 90% of us have incomes, still.....

I just hope it doesn't explode upwards now...I want to have some time to buy cheap shares over a long period....

 

[elvis]

...We are not too far now from having the world's most critical commodity losing HALF it's value in less than three months! That is almost beyond belief. That dwarfs the stock market losses, or the housing bust.

Cause....speculators, again.....we are now seeing runaway, as yet uncovered short sales in oil. They may drive this market into the 30's before its done and along with it, all the emphasis on alternative fuel and conservation....gas will not just drop below $3 but well below $2 and closer to $1. Unbelievable....

When it hits 30, start buying it.

 

[elvis]

Seriously, though, are they speculating that it is going to fall that far?