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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (94197)	12/5/2007 10:24:46 AM
From: Umunhum	Read Replies (3) \| Respond to of 206159

I wonder, however, whether the dip in demand last year in OECD oil imports might not be more significant going forward in view of a possible/probable recession in the US. I suppose that is about the only fly in the ointment. Dip in demand? Was there a dip in demand? Demand is a function of price. The higher the price, the lower the demand. If the price of crude oil rose to $150 a barrel and demand dropped by 4 million barrels per day as a result of the higher price, would you be worried that a recession could lower demand? Do you think demand would have dropped if oil stayed at $60 for the year? It appears to me the price of oil is what is determining demand right now. Going forward there is going to be less oil available so demand has to drop. In the past, oil demand has only dropped during recessions. Therefore it’s only logical to conclude that the price of oil has to rise high enough to cause a recession. And I read stories all the time that the price of crude oil dropped today because of fears of a recession. It’s an example of buying the cart before the horse. Meanwhile back at all the central banks of the world; all the bankers are trying to print as much money as they can to avert a recession. If you use true inflation adjusted numbers, we could be in a recession right now. Back in China the truck drivers are waiting in line for days for 30 liters of diesel. Looking at that picture of the line of trucks makes me think that China has got a lot of pent up demand that is not being filled at today’s “low price.” Over on the supply side of the equation the top 10 publicly traded oil companies of the world can’t replace their production despite oil prices tripling. The entire strip is now above $85. This latest "sell off" has been confined to the front months only: futuresource.quote.com I think that oil prices are going a lot higher and the value of paper currencies is going to continue to deteriorate. The price of oil is going into the triple digits. I don’t know how far but I am extremely confident that we will be above $100 by this time next year. I am thinking $120 by summer. After studying the oil market for years, I am of the mindset that it is not a question of whether you should take your last dollar and invest it in energy stocks, but how much leverage you should employ in doing so :o). I am also starting to become a big believer in gold. In the past I thought it would go up but now I think it is going to go up dramatically to 3k – 5k an ounce over the next 5 - 8 years. About the only thing I’ve read in the past few years that was not bullish for the price of crude oil was Brazil’s latest discovery.