Major Storm is at our doorstep


Peak oil is no longer a debate for the facts support this reality.  Technicians at the highest level simply assumed that the technology silver bullet would continue to enable us to find new reserves.  Wrong!  Economies run on energy and expansion requires additional energy.  The easy to find oil is gone and the expensive oil is reflected in the $95+ price reflects this.  Global oil production has plateaued since 2004, even with the high prices in the triple digits.

The assumption that technology will solve the energy storm is wrong.  Technology has improved extraction but it does not create new deposits.  Yes, there may be some large fields yet to be found but extraction won’t be easy.  Jed Clampett of the Beverly Hillbillies is not going to discover another large discovery of shallow oil by gunshot.  Depletion is barely being offset by new production but that offset is becoming increasingly difficult to achieve.

We are not out of oil but the extraction is more difficult.  These costs are going to superimpose themselves on the current recessionary pressures challenging global growth.  The fragile financial system cannot afford another source of resistance to recovery.

Once the market smells the rain in the air, prices will move upward and test $147 per barrel.  Once this barrier has been broken, $200 is not far off.


If I were in charge of making my currency look good and I had the authority over printing money and could direct agents to buy and sell gold without concern of legal prosecution, gold would be moving downward in the Christmas season.  My goal would be to make gold look like it was going to head south for the winter.  If I can shake the confidence of the gold bugs then they will help me move the price further down with their emotional selling.  With my high powered servers, I would simulate a technical “crash” for all those traders who use all the standard technical indicators to buy and sell.  I would paint their charts to create a sell signal for gold and the underlying gold shares.  The problem arises when China and India are on the other side of the transaction using their agents to buy on the dips and with the money they got from me by selling me trinkets and flat screen TV’s.  My focus is on the short term, no further out than November of 2012 when the elections conclude.  Their focus, on the other hand, is 10 to 100 years.   My focus on the futures market to move the entire market, an idea first penned by Walter E. Heller, as worked well in the past.  If we can just keep the wheels on the car for a little while longer!  Do I have a wild imagination or what???

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