Oil and Gold, Oil and Gold...

April 06, 2006

Oil and Gold, Oil and Gold...

Such a beautiful couple. Gifts that keep on giving.

33 comments:

Roccman said...: damn straight !! were it no for the HB and getting most all my news from the internet (as opposed to CNN, the BBC, major networks) - I'd have no hope of riding this one out. Gold today at $600 silver $12 AND BOTH ARE EXPECTED TO GO MUCH MUCH MUCH HIGHER...like $5000 gold and $500 silver...amazing how running out of oil is gonna make me a very rich man!!!!; April 06, 2006 4:32 PM
Anonymous said...: as oil price goes higher... is it time to buy IRAQ DINAR... ???

Iraq is the 2nd largest in OIL RESERVES !!!; April 06, 2006 5:14 PM
Anonymous said...: you goldbugs are funny.; April 06, 2006 5:25 PM
Anonymous said...: The scope of change that will be necessary as the oil runs out will be orders of magnitude larger than any adversity mankind has ever faced. Unfortunately for most of us, it looks like the "Last Man Standing" scenario will be pursued. The way I see it, you really can not count on the continuity of anything going forward.

That said, it sure fun owning oil and gold as I have for the past three years and watching the ol' portfolio go up & up. I figure the first 8% of each years gains is tribute to the inflation gods and any gain beyond that is mine to keep (at least for now).; April 06, 2006 5:37 PM
Anonymous said...: In short term (2-3 years) physical gold is the best investment. Don't buy stocks (miners, ETF, etc. ) all paper will go down toilet.

Timing is everything.

When shit hit the fan you're better out of gold - it's worsless then. Government will confiscate it again.; April 06, 2006 6:06 PM
John Polomny said...: You trying to branch out into gold and oil. Thats my territory. LOL Just kidding, awesome blog I am linked to you on my blog.; April 06, 2006 6:40 PM
Smart Grid blogger said...: Inflation concerns push mortgage rates higher
Thursday April 6, 1:07 pm ET

Mortgage rates remain relatively low, but they've been rising in recent months, a trend that continued this week.
Freddie Mac's weekly report says the average 30-year fixed-rate mortgage rose to 6.43 percent, up from last week's 6.35 percent average.

ADVERTISEMENT

Long-term mortgage rates are about a half percentage point higher than a year ago. One-year adjustable-rate mortgage reached 5.57 percent this week, about one and a half percentage points higher than one-year ARMs were averaging this time last year.

"There is concern that the continued high level of energy cost may lead to inflation in other sectors of the economy," says Freddie Mac (NYSE: FRE - News) chief economist Frank Nothaft. "And fear of inflation leads to higher mortgage rates, like the ones we see this week.

A report earlier this week from the Mortgage Bankers Association showed mortgage applications last week rose the most in two months. Refinancing also rose, although the refinancing activity is now about half what it was a year ago.

Published April 6, 2006 by the Washington Business Journal

http://biz.yahoo.com/bizj/060406/1269712.html?.v=1; April 06, 2006 7:00 PM
Anonymous said...: The reason we are paying so much for oil is that the left-wing tree worshipping crackers won't let us drill for our own oil along the Rockies, Alaska, and off the coasts. Now we have to rely on the Arabs, South American tinpot dictators and Afreaka; April 06, 2006 7:58 PM
Anonymous said...: Silverisgood

Oil is a commodity, the traders control prices. Using your logical falacies, it's ambulance chasing Edward's fault no one can afford health insurance.; April 06, 2006 8:33 PM
Anonymous said...: Check it out:

www.lifeafertheoilcrash.net; April 06, 2006 8:48 PM
Anonymous said...: The only reason we are paying so much is because every dumbass is driving around in a Tahoe. If we drove econo boxes the highways would be safer and this country would be safer due to reduced dependence on foreign oil.; April 06, 2006 8:55 PM
Anonymous said...: "How Do I Know Peak Oil Isn't Big Oil Propaganda That is Being Used To Create Artificial Scarcity & Justify Gouging Us at the Pump?"

If Peak Oil is "Big Oil propaganda" (as some claim), why did Sonoma State University's Project Censored declare it one of the most censored stories of 2003-2004? Surely, if "Peak Oil is Big Oil propaganda", Big Oil would have found a way to get it off the pages of under-funded publications like Project Censored and onto the pages of the mainstream papers and into the 24/7 cable news cycle years ago.

Likewise, if "Peak Oil is a myth propagated by the greedy oil companies to justify high prices", why didn't any of the greedy oil company CEOs offer "the peaking of world oil production" as a partial justification for high gas prices when they testified before Congress about high gas prices?

Yet "Peak Oil" was never mentioned during the hearings by either the executives or the Senators questioning them. Given the obvious importance of the issue, any reasonable person can't help but to ask, "Why the heck not?"

The answer is simple: the true consequences of Peak Oil cannot be acknowledged in such a highly public forum without crashing the financial markets or begging the obvious yet politically-dangerous and "patriotically-incorrect" question:

Is the war in Iraq really a war for the world's last remaining
significant sized deposits of oil?"

Although the answer to this question should be obvious, broaching the issue in such a highly public forum would bring more skeletons out of Dick Cheney's energy task force closet than any sane member of the Senate, Republican or Democrat, would ever want to face. (Would you?)

Finally, if Peak Oil was just "Big Oil" propaganda, why is Exxon Mobil (one of the biggest oil companies in the world) spending millions of dollars on its anti-Peak Oil advertising campaign?; April 06, 2006 8:56 PM
Anonymous said...: "Can't We Just Explore More for Oil?"

Global oil discovery peaked in 1962 and has declined to virtually nothing in the past few years. We now consume 6 barrels of oil for every barrel we find.

According to an October 2004 New York Times article entitled "Top Oil Groups Fail to Recoup Exploration Costs:"

. . . the top-10 oil groups spent about $8bn combined on exploration last year, but this only led to commercial discoveries with a net present value of slightly less than
$4bn. The previous two years show similar, though less dramatic, shortfalls.

In other words, significant new oil discoveries are so scarce that looking for them is a monetary loser. Consequently, many major oil companies now find themselves unable to replace their rapidly depleting reserves.

Take a look at the above chart. During the 1960s, for instance, we consumed about 6 billion barrels per year while finding about 30-60 billion per year. Given those numbers, it is easy to understand why fears of "running out" were so often dismissed as unfounded.

Unfortunately, those consumption/discovery ratios have nearly reversed themselves in recent years. We now consume close to 30 billion barrels per year but find less than 4 billion per year.

In light of these trends, it should come as little surprise that the energy analysts at John C Herold Inc. - the firm that that foretold Enron's demise - recently confirmed industry rumors that we are on the verge of an unprecedented crisis.; April 06, 2006 8:59 PM
Anonymous said...: "How Do I Know This Isn't Just Fear- Mongering by Loony-Environmentalists?"

If you think what you are reading on this page is the product of a loony-left nut, consider what Representative Roscoe Bartlett (Republican, Maryland) has had to say in speeches to Congress or what billionaire investor Richard Rainwater has had to say in the pages of Fortune Magazine.

On March 14, 2005 Bartlett gave an extremely thorough presentation to Congress about the frightening ramifications of Peak Oil. During his presentation Representative Bartlett, who may be the most conservative member of Congress, quoted from this site extensively, citing the author (Matt Savinar) by name on numerous occasions, while employing several analogies and examples originally published on this site. You can read the full congressional record of Representative Bartlett's presentation by clicking here. You can view a video of Bartlett recommending the article you are now reading to Resources for the Future, an extremely influential DC think tank, by clicking here.

On April 19, 2005 Representative Bartlett was interviewed on national television. Again, he referenced the article you are now reading:

One of the writers on this, by the way, starts his article by

saying, 'Dear Reader, Civilization as we know it will end

soon.' Now your first impulse is to put down the article. This

guy's a nut. But if you don't put it down and read through

the article, you're hard-pressed to argue with his

conclusions.

On May 12, 2005 Representative Bartlett gave another presentation about Peak Oil on the floor of the House of Representatives, stating that this website "galvanized" him. On July 19, 2005 he had the following to say:

Mr. Speaker, if you go to your computer this evening and do

a Google search for peak oil, you will find there a large

assortment of articles and comments. Like every issue, you

will find a few people who are on the extreme, but there will

be a lot of mainstream observations there.

One of the articles that you will find there was written by
Matt Savinar. Matt Savinar is not a technical person. He is a
lawyer, a good one, and he does what lawyers do. He goes to the sources and builds his case.

Matt Savinar could be correct when he said, "Dear Reader,
civilization as we know it is coming to an end soon.'' I would
encourage you, Mr. Speaker, to pull up his article and read
it. It is really very sobering.

In subsequent speeches, Representative Bartlett read large excerpts of this site verbatim into the official US Congressional record.

According to the December 26, 2005 issue of Fortune Magazine, Richard Rainwater, a multi-billionaire investor and friend of George W. Bush, reads this site regularly. In an article entitled "Energy Prophet of Doom" Fortune reporter Oliver Ryan writes:

"Rainwater," the voice on the phone announces. "Now, type
L-A-T-O-C into Yahoo, and scroll down to the seventh item."
Rainwater doesn't use e-mail. Rather, he uses rapid-fire
phone calls to spread the gospel he discovers every morning
on the web. One day it might be the decline of arable land in
Malaysia. The next it could be the Olduvai theory of per capita energy consumption. "L-A-T-O-C" stands for

LifeAfterTheOilCrash.net, a blog edited by Matt Savinar, 27, of Santa Rosa, Calif.

The article goes on to quote Rainwater as saying:

The world as we know it is unwinding with respect to Social
Security, pensions, Medicare. We're going to have dramatically increased taxes in the U.S. I believe we're going into a world where there's going to be more hostility. More people are going to be asking, 'Why did God do this to us?'

Whatever God they worship. Alfred Sloan said it a long time ago at General Motors, that we're giving these things during good times. What happens in bad times? We're going to have to take them back, and then everybody will riot. And he's right.

Apparently, Richard Rainwater and Alfred Sloan aren't the only people expecting large scale civil unrest in the foreseeable future. In January 2006, the Department of Homeland Security gave Halliiburton subsidiary Kellog, Brown, & Root a $400 million dollar contract to build vast new domestic detention camps. While the camps are ostensibly being built to house and process an "emergency influx of immigrants", one can't help but suspect they will be used to house domestic citizens who respond to the economic fallout of declining oil production by taking to the streets.; April 06, 2006 9:04 PM
Anonymous said...: "What About the Oil Sands in Canada and the Oil Shale in the American West?"

The good news is that we have a massive amount of untapped "non conventional" oil located in the oil sands up in Canada.

The bad news is that, unlike conventional sources of oil, oil derived from these oil sands is extremely financially and energetically intensive to extract. Whereas conventional oil has enjoyed a rate of "energy return on energy invested" (EROEI) of about 30 to 1, the oil sands rate of return hovers around 1.5 to 1.

This means that we would have to expend 20 times as much energy to generate the same amount of oil from the oil sands as we do from conventional sources of oil.

Where to find such a huge amount of capital is largely a moot point because, even with massive improvements in extraction technology, the oil sands in Canada are projected to only produce a paltry 2.2 million barrels per day by 2015. This doesn't even account for any unexpected production decreases or cost overruns, both of which have been endemic to many of the oil sands projects.

More optimistic reports anticipate 4 million barrels per day of oil coming from the oil sands by 2020. Even if the optimists are correct, 4 million barrels per day much oil when you consider our colossal and ever-growing demand in conjunction with the small amount of time we have left before the global peak:

1.We currently need 83.5 million barrels per day.

2.We are projected to need 120 million barrels per day by 2020.

3.We will be losing over 1 million barrels per day of production per year, every year, once we hit the
backside of the global oil production curve.

4.The general consensus among now disinterested scientists is that oil production will peak by 2010 at
the latest.

The huge reserves of oil shale in the American west suffer from similar problems. While Shell Oil has an experimental oil shale program, even Steve Mut - the CEO of their Unconventional Resources Unit - has sounded less than optimistic when questioned about the ability of oil shale to soften the coming crash. According to journalist Stuart Staniford's coverage of a recent conference on Peak Oil:

In response to questions, Steve guesstimated that oil shale
production would still be pretty negligible by 2015, but
might, if things go really well, get to 5mbpd by 2030.

Disinterested observers are even less optimistic about oil shale. Geologist Dr. Walter Youngquist points out:

The average citizen . . . is led to believe that the United
States really has no oil supply problem when oil shales hold
"recoverable oil" equal to "more than 64 percent of the
world's total proven crude oil reserves." Presumably the

United States could tap into this great oil reserve at any
time. This is not true at all. All attempts to get this "oil" out
of shale have failed economically. Furthermore, the "oil" (and, it is not oil as is crude oil, but this is not stated) may
be recoverable but the net energy recovered may not equal the energy used to recover it. If oil is "recovered" but at a
net energy loss, the operation is a failure.

This means any attempt to replace conventional oil with oil shale will actually make our situation worse as the project will consume more energy than it will produce, regardless of how high the price goes.

Further problems with oil shale have been documented by economist Professor James Hamilton who writes:

A recent Rand study concluded it will be at least 12 years
before oil shale reaches the production growth phase. And
that is a technological assessment, not a reference to the
environmental review process. If it takes 15 years to get an
oil refinery built and approved, despite well known
technology and well understood environmental issues,
viewing oil shale as something that could make major
contributions to world energy supplies in the immediate
future seems highly unrealistic.; April 06, 2006 9:07 PM
Roccman said...: B4 one starts to rant and attempt to debunk Peak OIl - please do the research. Start with ASPO.com then read the Parties Over by Heinberg, then read Twightlight in the Desert By Simmons - then read Crossing the Rubicon by Ruppert - JUST FOR STARTERS - then come here and post something intelligent - if you think Peak Oil is a hoax - you are clearly uninformed and wasting everyone;s time.; April 06, 2006 9:16 PM
Anonymous said...: Peak Oil is not a conspiracy...if prices are artificially high it's in everyone's best long-term interests...Problem is nobody in this country ever thinks about the long-term...It's always about the next fiscal quarter.; April 06, 2006 9:25 PM
Anonymous said...: Is there any other way to make any dough on bust.

http://www.cme.com/files/NP%2006-10.pdf; April 06, 2006 9:38 PM
Anonymous said...: 1 trillion barrels of oil in canadian oil sands

1 trillion barrels of oil in venezuela

who knows how much in alaska and the rockies

who knows how much undersea

they haven't touched mongolia yet

africa is just in the beginning stages

yes i understand we still need to conserve fuel for prices and the environment. i don't think we're anywhere near peak oil yet. it's more likely that we will reach peak consumption within the next 10 years; April 06, 2006 10:00 PM
Anonymous said...: The "trillions" you site are non-conventional tar sands/shale that practically take as much energy to produce as they provide...but if it makes you sleep better and gives you confidence when purchasing your next Suburban Assault Vehicle than nvermind my sour grapes.; April 06, 2006 10:17 PM
Roccman said...: At top production (in ten years) the Oil sand will produce no more than 5 million barrels per day - globally we consuume currently 84/85 mb/d...and I might add the toxic soup that this process leaves behind is off the charts!! Alaska has at best 10 billion barrels of oil (IN TEN YEARS) - we use that much in 3 months...like I said - to all you "ANONs" do th eresearch b4 you go spewing disinformation - oh - you may as well forget Ven's oil - it ain't there - the earth has a total of 2.0 to 2.3 trillion barrels of oil - check out what chevron posted in the washington post on October 15, 2005 - you naysayers about Peak Oil got a real big suprise ahead of yourselves....hey but keep thinking that wez gotz lotz and lotz of the black gooo...if it makes ya sleep better as one poster said ...have at it.; April 06, 2006 11:23 PM
Anonymous said...: If Peak Oil is a myth, then why do oil companies spend less every year on exploration?

Could it be, that they have decided they've already know where the economically recoverable oil is?? And that spending money on exploration is just pissing in the dark???

Would YOU operate a corporation that must pay 3% dividends to shareholders, while thowing away money on exploration that finds hardy anything????

HMM?????; April 06, 2006 11:41 PM
Anonymous said...: gold bugs are up 100% and rising

silver bugs are up 250% and rising

palladium bugs are up 600% and rising

all in the past 3 years; April 07, 2006 9:35 PM
Anonymous said...: Keep buying those Escalades and Suburbans and Hummers and commuting fifty miles to work--Bush's Arab buddies need your money!; April 09, 2006 2:15 PM
Anonymous said...: George and his bestest friend!; April 09, 2006 3:09 PM
Anonymous said...: Hey just to let you know that yes I am promoting this but if you dont want to save at the pump then dont go to the site but I believe no matter who you are gas is just to expensive.

The goverment is using it and many other huge company's. This is not just some fly by night company or product. This is the real deal.; April 20, 2006 2:32 AM
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April 06, 2006

Oil and Gold, Oil and Gold...

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