Thoughts from Wild Oats

[pilpilsner]

I will need less than twenty four months to be proved right
Oil is not going to 75 its going past 200
But its purchasing power will not be asmuch greater
This the pardigm change that is underway

[Zaphod]

Since you're willing to go out on a limb, I'll stick my neck out too. Oil will get up into the 90s but not over 100. Those prices are high enough to choke off demand and keep the market on the defensive.

[parsley]

$ 120.00 per barrel

[parsley]

Zaphod, you couldn't be more wrong. $90/barrel will be here before fall, and $150 will be broke before fall of 2010.

And once again most will be standing with the deer in headlights look.

You know that feeling of panic you feel when there are weather warnigs all around you, your sitting in the combine and you can see the storm in the west, but you need another hour and you'll have that 1/4 off before the rain comes??

That feeling is what you should be feeling right now with the economy.

The storm is coming boys and girls!!

[parsley]

And because the Cons are skating on deficit ice, and officially becoming the socialist team, the Libs will move to the right, serve voters the Paul Martin's 'balance the budget' item from the Liberal's pre-game menu, and win the election.

At 120, the Liberals will put on price controls because Ontario will squawk.

And that's a girly sermon. Pars

[Zaphod]

I'm not so sure. When the economy goes splat (and we agree that it will), who will be able to pay $150 or $200 for crude? Unless we all have wheelbarrows full of greenbacks like you suggest. Even so, pil stated it won't have any more purchasing power. So will it really matter? Is gold the only escape then?

[Zaphod]

The US dollar has puked 5 cents in May. Crude oil has gone up what, $8? Is that the best it can do? Hardly a screaming rally.

[pilpilsner]

Crude is up over 30 percent in atime frame measured in weeks

I need to grow a sharp pointy thumb nail to help me time on my blackberry

[parsley]

Crude will soon start pumping out agian.

[wd9]

Interesting tho is how the price of oil affected transportation, but the true effects were not realized because of the crash. Making iron in china is a good example. I believe it costs around 52 bucks to smelt iron in North america and the cost to transport a tonne of ore from Brazil to china who wanted to ship the iron here cost 65 to 70.

So what you say. Seems it is more cost effective to smelt in our own back yard with the plant here. Cheap oil distorts everything so in the end a true costing of the energy makes mills and plants more economical right here. Will affect things like food too where we have grown used to eating an avacado and blueberries in winter.

Will we see the return of manufacturing and processing back in our country with the true of transportation realized?

[wd9]

Damn... The true cost of transportation.

[cottonpicken]

http://www.usatoday.com/news/washington/2009-05-28-debt_N.htm

[gustgd]

h/t Brad

http://seekingalpha.com/article/139484-the-agriculture-re-boom-is-coming

[Zaphod]

Sounds like someone is talking up their position (maybe trying to sell their fund?). The only problem is that Saudi Arabia (OPEC) did cut back on their oil production, and the slide just kept on going. The whole economy is way more precarious now than it was last year. A big spike in prices will just cause the whole thing to collapse on itself again. It can't be sustained in real terms. In inflated dollars, certainly. But is anyone further ahead? No.

[Fransisco]

Funny, to read this stuff while canola is tanking. You guys may very well be right but for now the canola chart is pointing in the other direction.