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262 comments on DrumBeat: May 28, 2008

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abelardlindsay on May 28, 2008 - 10:06am Permalink | Subthread | Parent | Comments top

I agree. When Gold and Silver start bubbling up, old mines are re-opened. People take their hairloom jewelry and silverware and sell it in mass and the supply increases. When the housing bubble rocketed up, there was massive overbuilding. Now with the huge run-up in oil, there are no substitutes and declining supply. During the great whale oil price spike in the mid-1800s, at least there were alternatives.

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mcgowanmc on May 28, 2008 - 10:26am Permalink | Subthread | Parent | Comments top

But what's this?

I love looking at sites that are so correct in their field.

But refuse to believe in civilization ending scenarios
coming from outside their expertise:

"
Oil has gone from $55 a barrel on up to $132 a barrel. Inflation could account for about $30 of that increase. I wouldn't blame this mess on the oil companies, this has all of the ear marks of a speculative corner of the oil market by parties unknown.

The commodities markets are going to have to limit the number of contracts written and only accept liquidation orders like they did with the Hunts. It's kind of like sticking a broom handle into the spokes of a moving bicycle. It will be quick and brutal. Hold on to your SUV and your hat, another bubble is about to pop."

http://greatdepression2006.blogspot.com/

And as this very same site picks up on who really owns the markets.

Let me post this again:

"The commodities markets are going to have to limit the number of contracts written and only accept liquidation orders like they did with the Hunts."

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umass82 on May 28, 2008 - 11:03am Permalink | Subthread | Parent | Comments top

Inflation is responsible for an increase in the price of oil or is it that the price of oil is responsible for an increase in inflation?

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Moe_Gamble on May 28, 2008 - 11:10am Permalink | Subthread | Parent | Comments top

Yeah, well that's the question, isn't it?

In my opinion, it's the price of oil that is primarily responsible for the price inflation we're seeing, but there certainly has been a pile-up of dollars in the world over the past few years, which means it's probably both.

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eric blair on May 28, 2008 - 12:03pm Permalink | Subthread | Parent | Comments top

Or how about inflation is the result of an increase in the money supply?

As an example:
http://www.futurecasts.com/Understanding%20Inflation.html

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CrystalRadio on May 28, 2008 - 11:28am Permalink | Subthread | Parent | Comments top

Hi mcgo, here is a day later from denninger

.But this is not "speculative premium" in terms of market manipulation or "evil people", it is people buying oil and oil products as a stable store of value!

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john15 on May 28, 2008 - 12:03pm Permalink | Subthread | Parent | Comments top

"Now with the huge run-up in oil, there are no substitutes and declining supply."

the electricity that runs your computer can run your car. some can use waste vegetable oil. we can use oil most efficiently. those are some substitute.

we still have half our oil left.

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mcgowanmc on May 28, 2008 - 8:48pm Permalink | Subthread | Parent | Comments top

"we still have half our oil left."

"Low-hanging fruit" that just bubbled out of the ground.

EROEI is exploding now.

"...the electricity that runs your computer" is taxing the grid.

Tell me why the UK's collapsed yesterday.

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DaveMart on May 28, 2008 - 8:57pm Permalink | Subthread | Parent | Comments top

This was the kind of outage that happens sometimes, and appears coincidental.
Blackouts from shortages and retired equipment together with short supplies of natural gas is a pleasure that is not here as yet, but it is coming.

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