Cross post - oil, Y2K and hyperflation

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

See today's frumious rising action in crude oil at http://www.quote.com/quotecom/livecharts/default.asp?symbols=CL00H

At the top of the chart, enter CL00H (march crude) next to Sym select a time interval of D (day) and at the bottom click the pulldown and select Volume.

You'll see the upward breakout on massively increasing volume. Wow!!!

Now let's look at gold, enter GC00J ...

(Marcia) Jan 14, 12:59 This feels like the Calm before the Storm........ (Don_L.) Jan 14, 13:07

Table is now set (noula) Jan 14, 13:05 Looks like our table is now set:

- Chinese legalize public gold purchases, state owned coprporations can now liquidate the country's large holdings of $US through the smokescreen of "consumer demand" - EU CB's to move gold thro BIS thus avoiding LMBA and NY markets and a cessation of leasing to LMBA-NY bullion banks - Barrick reconsiders hedge program - gold production falling which may accelerate due to Y2K problems - Fed increases money supply by 70% annualized rate in Q4 1999 - Open interest on NY COMEX continues to collapse signalling extreme illiquidity in the PM markets - Feds have losing ability to influence commodity markets as supplies dwindle to critical levels - the manipulation game is up - Y2k hitting US oil production in a big way - KGB takes over Russia, has its organized crime network thoroughly infiltrated in the west - Chechnyia war signals Russia's intent to control Euraisan oil supply - Continued Arab oil supply to the west contingent upon Israel relinquishing lands taken from Syria and Lebanon, a cessation of hostilities towards the Lebanese civilian population, a fair settlement of the Israeli induced displacement of the Palestinian population since 1947 and free access for Muslims to the Mosque of Omar in Jerusalem (folks this means war)

Next week should begin the next great leg in the gold bull market. CRB could reach 230 within 3 weeks. Hold onto

-- Ed (ed@lizzardranch.com), January 14, 2000

Answers

Thanks Ed.

Ray

-- Ray (ray@totacc.com), January 14, 2000.


Ed and others...

The funds have been getting long all week and today, they blew the doors off it. As I've said before, when these guys wanna buy something, they buy it. You should all think real hard about whether you buy the "new saw" that CPI is really meaningless unless you separate it and "get to the core inflation". Ask yourself how many things you use that don't involve oil? Really think it through and then ask yourself if you think rising crude prices are inflationary, deflationary or meaningless? You're kidding yourself if you answered anything but inflationary. Why do you think we're sending the Michelin Man (Richardsonian) over to make an ass of himself with the Saudis et al?

Also, I can tell you for a fact that the "funds" don't get long crude to make a quarter. These boys are looking for a real move. That would mean 29-30 dollar WTI for us. The reason for thier bullishness comes from some amazing new found Arab solidarity over there.

These guys (OPEC) are getting some serious payback for last year and then some. Me thinks the "new economy" is going to have to reconcile itself to the "new OPEC" before we start chalking up any more 100 point days on the Daq. Opec is dead serious about not cheating with this thing and keeping solidarity. We blew our foreign policy bigtime. These guys even managed to keep the Vens in the game despite some VERY serious shit down in Venland. This is a wake up call people. We hit nine year highs on the crude today. Not seen since the freaking gulf war. And no, I don't think this is wholly due to Y2K, but I wouldn't go so far as to rule out production problems as a contributing factor either. I know (f*ck you pollies) of actual Y2K problems that HAVE caused problems at refineries post rollover. And, there are refineries that are having problems getting back on their feet after little "un-named" snafus. I don't buy the story that all is well.

Regardless, inflation is here now and is here to stay for a while.

-- Gordon (g_gecko_69@hotmail.com), January 14, 2000.


For what its worth I made some safe (relative percentage) bets on the fact that inflation was a forgone conclusion (Thanks big Al). These were made late last year and I am prepared to hold these for at least 2 years.

My picks were oil, gold and money markets, cashing out of stocks up to last week. If stocks go higher still you will not see me crying for some paper gains. I will have gladly locked my 1990 gains up rather than try to guess a market turn, all new paradigm investors are cordially invited to get the last dime.

For new investors, inflation is generally bad for stocks, bad for bonds (especially long term low rates), and could mean a boon for commodities. I would personally like to see a broad bull market for commodities because of the hammering the farmers have been getting during most of the great bull stock market.

Place your bets ladies and gentleman. Remember the truest way to gather wealth is to shun debt.

Living through the lean years is much easier if you prepare during the years of plenty. The more things change the more they stay the same.

-- Squid (ItsDark@down.here), January 14, 2000.


Ed,

Good post.

Any additional detail on Y2K impact on gold production?

What is the source for your quote?

Thanks.

-- Bill P (porterwn@one.net), January 14, 2000.


shun debt

If you really believe there will be hyper-inflation then debt in current dollars is good if you use the debt to purchase commodities. You just pay back with cheaper dollars.

If you believe the currency is stable then debt is very bad.

So, while many posters here may have moral concerns about getting into debt they should not let that cloud their economic assessment.

-- cgbg jr (cgbgjr@webtv.net), January 15, 2000.



There is the possibility that you could rack up tons of debt and hope that you can pay back with dollars worth less. Problem with this is timing, what do you do if you are faced with a liquidity problem and your debt is called? Also there is a limit (for most) on the "cheap" money they can borrow. You rack up what revolving credit with a charge card with rate payments that balloon with inlation? All debt is not bad but the HUGE high interest credit that is financing the standard of living is bad and this will consume most people. This will also make any recession a "shock" recession with a growing default as income streams slow.

-- Squid (ItsDark@down.here), January 16, 2000.

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