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Strategies & Market Trends : Technology Stocks & Market Talk With Don Wolanchuk -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (9095)	5/20/2003 8:28:50 AM
From: robert b furman	Read Replies (1) \| Respond to of 207248

HI Mike, My comment on cheap oil is a very long term view. The first drop of Iraqi oil has yet to be pumped. With Northern Iraq now settled - Russian oil from the Caspian Sea (and most of the STAN countries) can now be piped thru Iraq Turkey and supply Europe.Exxon has a huge development that will begin shipping oil from Africa.There off shore rigs are 150 miles out into the delta of the Congo river.This is a huge never before tapped resource as is most of the Caspian sea area.Add these new sources to the Iraqi fields which technology can convert to super cheap oil ( possibly the only rival to Saudi's reserves)and you have the very real possibility of competitive forces entering an equation vs the historical OPEC strangle hold of a false price. Why would the concept of false prices being busted up and destroyed be such an unbelievable concept? Over the course of history - it is the norm.Falsely held up prices are always succumbed to market forces and new supply.It is the story of gold, tulips,and stocks.In this case it just took more time as oil is very capital intensive and major projects take decades to develop. The final blow to the resource rich countries will be the looming development of alternetive fuels: Hydrogen fuel cells. Although a very long way out, they will create a time line where the resource rich countries must get market share and develop into other than a resource based country.As this time lime of alternative energy defines the end of growing resource demand - a competitive push for market share and wealth creation will put pressure on price. Heck ,the U.S has centuries worth of coal and it is almost worthless. A global recovery is in the cards.Look at the money printing going on - it will get worldwide in scope.The U.S. market will be the first pump primed - another historic norm. Fighting the trend - and betting on deflation will be very dangerous to your wealth. We will see a global economic recovery.Global inflation will result and equities will go up as that recovery precedes the resulting inflation.Gold will then be a great move. I don't know why it is so hard for people to see that productivity gains ushered in from the internet has resulted in tremendous savings which have enabled discounts in product costs.These discounts have reflected in deflation.In a world of excess capacity discounts squeeze out the noncompetitive.i.e. Fiat,Ford,Mitsubishi.This is a lagging benefit of the 99-00 "bubble". The bubble was just a stock distribution top - not the end of the world.It has now been 3 full years and leaders are breaking out as a new cycle is forming. JMHO Bob Just remember where you heard it first.<VBG>