Indochina consuming 1/4 of the world oil supply? Maybe you meant to say "India Plus China", Indochina will never consume even 10% of the world oil supply. But even if these two countries (India and China with about 40% of the world population?) gets to be half as affluent per capita as the developed world, that will take a good 20 to 50 years (if they do not eradicate each other first). Frankly, by then, I believe that alternative sources of energy will come to the fore, like cold fusion. Even if that dreams takes longer, the supply of liquid hydrocarbons is quite elastic, and if oil goes to let say $40/barrel, vast supplies of oil shale will open up to commercial extraction. Furthermore, at that kind of a price, GTL technology to recover the trillions of cubic feet of natural gas laying around, or worse, being flared, could be exploited. And you know what, at $40/barrel of oil, one would still pay less for gasoline here, then people pay in Europe today at $20/barrel.
I do not know why everyone that interested in gold must see an economic catastrophe as the sole way to create a bull market in gold. A bull market in gold will happen, once marginal producers shut up their inefficient plant and thus reduce the supply. Right now, these outfits have sold two maybe three years forward production at prices well above today prices, and with the CB in the mood of dethroning gold from its august monetary status, there is not much of an impetus for more then rallies to the high 290 or so in gold, IMHO.
Zeev |
