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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (23157)	9/4/2002 5:44:45 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

<So your argument is that petroleum will soon be obsolete so they should try to sell it while they can rtaher than maximize the revenue per annum? > David, it's more of a net present value argument, though obsolescence is part of it, but political stability and competitive position come into it too, as well as Greenhouse Woes and carbon taxes. I wouldn't pretend that I could come up with an optimum price, for Saudi Arabia, but I do think the price is too high at present. However, I'm not privy to the political pressures which the USA puts on Saudi Arabia to keep prices at a high enough level to keep the USA producers happy and their political cronies such as George II and Cheney on side, who also have an electorate to keep happy enough. As Sheik Yamani said, paraphrased, the stone age didn't end for want of stones and the oil age won't end for want of oil. Therefore it's important for low cost producers to get their piece of the action while the getting's good. On the NPV issue, $10 obtained now and invested in QUALCOMM and other super-duper high-return enterprises is better than a barrel of oil left in the ground for another 30 years, at which time it will be worth $10 if it hasn't been stolen by Egypt or India or Uday Hussein or Pakistan or the USA or a revolution in the ranks or confiscated by a revamped United Nations to fund global operations. If they are lucky, reductions in competing reserves and demand might mean it's worth $20, but that's a couple of birds in the bush. It might be worth only $5 a barrel - there is a lot of energy in various forms. Imagine if fusion was tamed - perhaps with graviton spin reversal enabling simple cold fusion. Energy might become near-zero cost. Sure, there's no indication yet, and as with CDMA it would breach the laws of physics, but CDMA is now taking over mobile cyberspace. In 30 years, the New Paradigm investments will be worth $100 or $1000. The Saudis rulers or whoever gets that $10 investment could live in splendour in exotic countries instead of in fear of the scimitar in a religious head-hacking culture of medieval mullahs. What if the silly jamboree in South Africa had decided that carbon should be the source of government revenues around the world. Eeek!!! That would NOT be good for Saudi Arabia. Better to sell their oil before people get really worried about CO2 emissions and whack big taxes on. Carbon tax as a way of funding government makes good sense. It's easy and cheap to collect, carbon feeds the economy so all would pay directly or indirectly, it would tax imports rather than local production and might just minimize greenhouse effects if those really are something to worry about. Because the political muck in the middle east is causing major problems around the world, maybe the United Nations will just gang up on the wacko Mad Moslem Mullahs who are encouraging head-hacking and planes being flown into big buildings and other Jihad and confiscate Iraq, Iran, Afghanistan, Saudi Arabia, Kuwait and the rats and mice. They could be occupied by 10 million Indians, Chinese and Russians in United Nations uniforms, along with Blue Uniformed local police and government. The oil would be used to fund United Nations operations and local civilization instead of profligate Rolex Sheikdom. I think the locals would go for it too [they don't get much trickle-down wealth at present]. I think they'd enjoy being the focal point of global civilisation instead of the ugly backwater they are now. It would give them job opportunities, business opportunities, peace, light and harmony. They could become the richest place on earth instead of a murderous medieval muck hole. A renaissance of the birthplace of civilisation. Before the world figures that out, it would be as well for the Sheiks to get their oil sold, money in the Swiss Bank and bolt holes in safe houses around the world. That's the short version, Mqurice