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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (11436)	5/18/2004 11:27:37 AM
From: Little Joe	Read Replies (1) \| Respond to of 108763

While it is true that economic conditions were different, we certainly did not have deflation during the last oil crisis. What scares me now is that the fed is printing money like confetti and we are still not seeing wage inflation. If we don't have wage inflation and we do have commodity inflation, how will people live? The frantic attempts by the fed to pump up the volume of money, with little real benefit, except the creation of more debt portends serioud problems. How they will manifest is the part that is hard to understand. Little joe

To: isopatch who wrote (11436)	5/19/2004 2:04:08 AM
From: elmatador	Read Replies (1) \| Respond to of 108763

Higher oil prices is a tax on the users of petroleum derivatives, i.e., everybody in the planet, barred a few aborigines and a few places in Sub-Sahelian Africa. Clearly, funneling USD into OPEC coffers drains purchase power from consumers. A few questions could be: 1) For how long the present high oil price wave will persist? If consumers few it will persist for a significant time, they will start changing their habits. Junking gas guzzlers, diminishing their mileage, cutting air travel... 2) Is it going to come down as OPEC re-starting cheating as much as they had before? (Prices are high because they are not cheating as much on their quotas as before.) Last time around, oil shock of 1973, was in fact the oil boom from the exporting countries perspective. The capacity of OPEC countries to spend their money was higher than their capacity to earn it via exports. That is what triggers cheating on their quotas. 3) Is this the high oil prices that signals dwindling reserves world wide pointing to the end of the oil era? If higher prices persist for too long, alternative sources of energy -not green stuff- but mainly, ethanol and oil shale sands will become competitive vis a vis gasoline. But that would be only the part of the iceberg above water. a) If that's so, it would be very interesting to see industries die and other nascent industries taking their places. Imagine substituting all motors of most of the buildings of NY City to save energy, improving High Voltage transmission lines and its switch gear all over the world. b) Re-starting hydro power again, restarting nuclear. c) Aluminum down, copper up. ...