Crude oil skyrocketing

[biglentil]

Instant deflation . . . demand rules, not supply

What we are seeing is that the supply side of the equation is just as important or maybe more so than the demand side. We live on a finite planet and supply of physical commodities are not easily ramped up. Mines take 15 years from discovery to production on average. Goods only come into existence 2 ways they are either mined or grown. Whether it's copper, zinc or oil the grades and return on energy invested has been on the decline for many years now.
The low hanging fruit has been picked so to speak. Then tack on the regulatory and environmental hurdles and nothing gets produced. I was told by a higher up at Enbridge that we will never see a new pipeline built again. Line 3 replacement I was paid for 6 years ago is still being blocked on the US side.

Money supply is growing many multiples faster than productivity.

[errolanderson]

Errol market implodes, wheels come off the supply chain and you buy what?

Instant deflation . . . demand rules, not supply

[biglentil]

The U.S. Federal Reserve is running out of firepower very quickly. Money printing simply doesn't have the same jam anymore and the Fed knows it. That's why they want to slow the printing presses in 2022. It doesn't work anymore. Now stir in the ridiculous U.S. debt ceiling fiasco . . . .

And when reality strikes, the downside risk is immense, courtesy of central banks artificially supporting equity valuations well beyond. But investors are convinced (and have been conditioned) they are in a protected investment cocoon.

Errol market implodes, wheels come off the supply chain and you buy what?

If 2008 is any guide the bail outs will be immense. Since then Trudeau put legislation that allowed for bail ins. If you are heavily in cash be prepared for a significant haircut right off the top of your savings account.

[errolanderson]

errol has a good handle on supply demand dynamics but I feel he doesnt account for the federal reserve and the layer of endless govt regulations being forced on us disguised as policy but probably closer to great reset ambitions.

Personally, I think the govt wants sky high oil without real alternatives. They have had 25 yrs to build solar panels and still havent. More like the goal is energy poverty.

The U.S. Federal Reserve is running out of firepower very quickly. Money printing simply doesn't have the same jam anymore and the Fed knows it. That's why they want to slow the printing presses in 2022. It doesn't work anymore. Now stir in the ridiculous U.S. debt ceiling fiasco . . . .

And when reality strikes, the downside risk is immense, courtesy of central banks artificially supporting equity valuations well beyond. But investors are convinced (and have been conditioned) they are in a protected investment cocoon.

[biglentil]

errol has a good handle on supply demand dynamics but I feel he doesnt account for the federal reserve and the layer of endless govt regulations being forced on us disguised as policy but probably closer to great reset ambitions.

Personally, I think the govt wants sky high oil without real alternatives. They have had 25 yrs to build solar panels and still havent. More like the goal is energy poverty.

Of course, all in the name of climate change. The promise of a panacea of the green economy all while knowing full well it will improvish the many. Build Back Better not for you or I.

Thing is Errol may very well be right there may be a deflationary debt spiral of a crash coming. Then they can claim it was due to the failure of capitalism and a lack of central planning. I highly doubt such an event will be a buying opportunity for those holding cash. At such a time physical commodities may be nearly unobtainium. In a world of infinite paper and failing economies physical goods are king.

[jazz]

errol has a good handle on supply demand dynamics but I feel he doesnt account for the federal reserve and the layer of endless govt regulations being forced on us disguised as policy but probably closer to great reset ambitions.

Personally, I think the govt wants sky high oil without real alternatives. They have had 25 yrs to build solar panels and still havent. More like the goal is energy poverty.

[biglentil]

Commodity prices simply can't hold for the long-haul in this worsening global environment. Inflation to me is totally transitory. Government debt and spending is beyond ridiculous . . . . There are serious cracks surfacing in many sectors, but the market is pretending that inflation is A-OK and be prepared for more.

The idea that inflation was transitory was lie, I called it many months ago. Inflation is the expansion of the money supply. Price increases are the symptom. Central banks used their last tool, jawboning, all while the printing press goes brrrrrrr. Raise rates and the economy implodes in series of cascading defaults or keep real rates deeply negative like they are and experience a melt up. Either way the fiat monetary experiment is on its last legs. Let them eat paper, commodities cannot be printed.

https://www.zerohedge.com/markets/rabobank-today-what-sassing-glorious-lie-inflation-was-transitory

[burnt]

Will this change the lofty oil price projections ...

https://www.reuters.com/business/environment/us-eu-line-up-over-20-more-countries-global-methane-pact-2021-10-11/

Also livestock are going to be targeted. This has been in the works a while but Canada just jumped all in officially now.

Worth a hyperlink, furrow -

https://www.reuters.com/business/environment/us-eu-line-up-over-20-more-countries-global-methane-pact-2021-10-11/

So India and China, with over 1/3 of the earth's population, seem a bit reluctant to get on board with the massive production cuts needed in every necessary, essential commodity to "maybe" make a tiny impact on the climate.

It's almost as if they foresee the consequence of starving a mass of almost 3,000,000,000 people...

Why is it that only Western nations are willing to sacrifice their people to the climate gods?

What is the "rationale", if we may use that term in this context?

[AlbertaFarmer5]

Commodity prices simply can't hold for the long-haul in this worsening global environment. Inflation to me is totally transitory. Government debt and spending is beyond ridiculous . . . . There are serious cracks surfacing in many sectors, but the market is pretending that inflation is A-OK and be prepared for more.

Except, the other side of that coin is that inflation is the ONLY way the ridiculous government debt and spending can be sustained. They are, and will do whatever they can to keep the party going. How long will they be sucessful, is another story.

[errolanderson]

errol, imho, everything will go through a hard reverse at some point. A crash will be the thing to revert all prices back to the mean. The only question is what that catalyst is and when it happens.

even if the govt floods in trillions for infrastructure, that will take years to get off the ground.

I would argue we are near the point of another recession.

Commodity prices simply can't hold for the long-haul in this worsening global environment. Inflation to me is totally transitory. Government debt and spending is beyond ridiculous . . . . There are serious cracks surfacing in many sectors, but the market is pretending that inflation is A-OK and be prepared for more.