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Gold/Mining/Energy : Oil & Gas Price Economics -- Ignore unavailable to you. Want to Upgrade?

To: excardog who wrote (265)	9/13/2000 10:02:55 PM
From: Mark Adams	Read Replies (1) \| Respond to of 350

Then we all agree that higher oil is going to lead to higher inflation Agreed- which in turn will lead to higher interest rates which in turn will lead to a slowing economy. Oui This may not follow- if the fed sees fiscal restraint throwing the economy into recession, then I think they have an obligation to lower interest rates even in the face of higher inflation. We have to wait and see what the Politicians decide re tax policy near term, then what the Fed decides too. If we are agreed that something's got to give, how do we profit on our wealth of advance knowledge. Puts might be one choice. I stumbled over Oil as an input to Paint yesterday, today Sherwin Williams preannounced. Yet the stock only dropped a point and a half. Not enough to make a put worthwhile. Maybe long term puts on the indexes? How does one protect one's wealth in the face of higher inflation? Real Assets? Real estate seems to be inflated already, so I'm reluctant to tread there. Metals come to mind. I have to assume you're talking the metals and not the miners. I own very little chunk of ABX- a play on Gold, but higher fuel costs will hurt there too. I'm reluctant to own metals outright, as there is a carry cost and an opportunity cost. I'm playing with fuel cell stocks. Any other ideas maybe not even stock related. I think alternative energy players make sense, but the few I've looked at thus far are already trading at a premium. Plus we have the possiblity that the baby may get tossed with the bath water- if the indexes trend down then even companies performing well may lack a good bid. Might check out a post I stuck on the Drillers thread- Message 14379211 I think where industry moves to limit our dependance on Oil based energy will profit from the higher prices, while providing a long term benefit to society. You might go so far as to say I now believe that oil should go higher and stabilize there, just to encourage such development. I've also traded some crude futures of late. Talk about some wild action. Futures I should be playing with, just to get the experience. Unfortunately, I've not been that ambitious. I think I Bonds- yielding 7.49% with an inflation hedge built in make sense. But you can only put 30k/year there, and once it's in, there's a penalty to pulling it out before 5 yrs. TIPS currently yield to low, and complicate the tax situation. I am predicting a recession by the fall of 2001. Just enough time for our new prez to be finished with his honeymoon. Expect to be out of the market sometime after the first of the year. Happy to hear anybody else's ideas. I'm not sure what to do. Too many balls in the air to predict how things will turn out, and other than hibernating for some time I don't see any great way to deal with what we think will be the probable outcome.

To: excardog who wrote (265)	9/15/2000 10:23:09 PM
From: Alan Brezin	Read Replies (2) \| Respond to of 350

I never agreed with the concept that an increase in the price of a necessity like energy leads to inflation since we all need it and have less money available after paying so much more for it. Less discretionary income, the result of paying more for a basic necessity like energy, eventually leads to a slow down, much as confiscatory taxes would cause. These higher energy costs are like taxes, imo, and, unlike the government which turns around and spends extra tax dollars fueling inflationary pressures, the energy companies only spend it on a few executive bonuses and some dividends to a relative few, imo. Further foreign economies dependent upon higher priced energy get fewer orders from a slowing US and their economies slip into recession fueling further recessionary pressure on the US economy since they then can't buy as much US exports. Net net higher energy costs are recessionary, imo.

To: excardog who wrote (265)	10/9/2000 6:30:53 AM
From: Vincent Ramirez	Read Replies (3) \| Respond to of 350

50 year world oil forecast.Written for a private investor. members.aol.com This report was written when the price was low, and is pretty lengthy, but seems to have been on the mark. Lots of discussion about production, decline, new reserves, and relations between inflation and oil prices. I am trying to gain some interest in the subject here in a very public place, because important financial predictions can be made by analyzing just a few of the worlds largest oil fields. I would like to gather a team of friends that might each have access to these fields so that we can compare cumulative production, production rates, forecast decline curves and then opex for these largest fields. Data probably aren't published, so anyone consulting out there care to join in? Vince