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Key Oil Figures Were Distorted by US Pressure: Whistleblower

Discussion in 'Sports and News' started by TrooperBari, Nov 11, 2009.

  1. TrooperBari

    TrooperBari Active Member



    I know, we've all heard the Peak Oil spiel before, but it sounds like it's not just the conspiracy theorists and wilderness-based whackjobs espousing it anymore.
    Last edited by a moderator: Dec 15, 2014
  2. Twoback

    Twoback Active Member

    And I could find another to tell you that peak oil isn't even true.


    Who really knows?
  3. JR

    JR Well-Known Member

    These guys do. They're part of the back-to-the-landers.

  4. Boom_70

    Boom_70 Well-Known Member

    commodities traders trying manipulate the market - time for the next ride . They need to move the money from gold .
  5. cranberry

    cranberry Well-Known Member

    Gold will peak when the Fed starts supporting the dollar by gradually starting to push up interest rates. My guessis that it will happen relatively soon, but it's a delicate balance to strike with high unemployment and credit already tight.

    Anyway, it's way too late now to be hedging with gold but I think the big-time players see a new opening to push oil prices higher ... again. Regardless, it's a fool's game to follow the institutional money.
  6. The Big Ragu

    The Big Ragu Moderator Staff Member

    Did you click on the link or just reflexively post that?

    The allegation is that the U.S. government has not accurately reported how depleted existing oil fields are and has been innacurately overplaying the story of reserves. If that is true, our government has been deceiving everyone, including commodities traders, who are being fed false information (although no one with a brain invests in a oil based on U.S. government estimates of reserves).

    Claims of market manipulation focused on unseen forces somehow driving up the price of oil, but if what is in those links is true -- and it is attributed to a whistleblower at the International Energy Agency -- what our government has been doing is trying to keep the price of oil down below where it should be based on fundamentals, and keep people in the dark about how much oil there is, so as not to trigger buying, which would drive up the price even more.

    That storyline, true or untrue, certainly makes more logical sense than vague notions of manipulation that try to create boogymen without any proof. Our politicians have every reason to try to keep gas prices down, even if it means trying to manipulate information so investors don't know the true supply picture based on fundamentals. When gas prices rise, people gather their pitchforks. Scared politicians then create pinatas and point fingers at them to deflect the unfair attention from themselves and unfortunately too many people looking for a scapegoat buy the BS.

    Why would it be surprising that at the same time they are getting hammered over gas prices rising (unfairly), they try to deceive people about how much oil is being pumped and what reserves are if the picture is bad, in order to try to prevent panic buying, which would drive the price up even further?

    Regardless, unfortunately for our politicians, there are too many hedge funds that research on their own what the oil fields are pumping out and at what cost, and they are on top of new field discoveries (or the starling lack of them) without the info having to be fed to them.

    Ken Kurson (who has written some horribly wrong things, but I am not so sure about this) had a story in Esquire of all places that I happened to see recently in a waiting room. He quoted the fellows at CommonWealth Opportunity Capital extensively talking about how we are running out of oil, and they are essentially spending more and more to try to pump what they can out of the fields they have worked to death already.


    So obviously, even with the lies of the estimates, there are investors doing their own work who know the true story. Even if the U.S. is playing fast and loose with the numbers, and it is a certainty, the market knows the truth. So I seriously doubt it has influenced prices that much, if any.
  7. The Big Ragu

    The Big Ragu Moderator Staff Member

    Cran, After they extended zero rates a few weeks ago, the Fed came out and said (in language the Fed never uses in my experience) that they are not raising rates anytime soon, the dollar be damned. They had to, because they are more freaked out by how stagnant the economy looks and unemployment than they are by the inflation they are bringing to a boil. The way the Fed works -- they are near-sighted. They can't look beyond their noses, so they will gladly risk a greater problem to deal with the politically expedient problem their political bosses are getting hammered by today. And that is unemployment. Plain and simple.

    Unemployment just hit 10.2 percent (and it is likely higher, because, yeah, the government manipulates those figures to make things seem rosier too. I don't need a whistleblower to inform me of that one *gasp*). Raise rates a quarter of a point and you are looking at 12 percent in very short order. That is the last thing President Obama needs. You may be looking at a rate that gets pushed that high either way, in which case rates won't be going anywhere until God knows when. I really do think they'd turn our currency into Zimbabwe's if they have to, as they raise debt and devalue it in their silly efforts to control unemployment so the president doesn't get hammered.

    Gold started to separate itself from the dollar recently. But as long as the dollar weakens -- and it hit a 52-week low yesterday -- it is just strengthening gold, which is sitting at close to $1120 now. These are really strong factors. No one who has been buying it on its run up has been hedging anything. They purely are trading -- trying to make money on a commodity they see gaining value based on a zillion factors. Maybe the market for it is overheated already. Or maybe there is quite a bit of run left. We'll see, I guess.
  8. BTExpress

    BTExpress Well-Known Member

    I find it hard to consider any effort to control unemployment "silly."

    It may be a grossly simplistic way of looking at things, but . . .

    Low unemployment and high inflation > High unemployment and low inflation.

    Inflation is a nuisance on a personal level. Unemployment wrecks lives.
  9. The Big Ragu

    The Big Ragu Moderator Staff Member

    1) They can't control unemployment. They've spent like made, racking up debt, and tried to inflate it away by crapping on the currency. And it is at 10.2 percent and still rising. It's crazy to continue the Keystone Cops act that doesn't work when you are not only having little effect, you are creating bigger problems.

    2) The inverse correlation between employment and inflation doesn't hold, especially in the world we've seen the last 40 or 50 years. There is such a thing as stagflation. It crashes people's worlds, but since the late 1970s, the world hasn't really worked the way they told people it absolutely has to in those intro macroeconomics classes. The correlation isn't just grossly simplistic. It hasn't held to be necessarily true. Introduce an oil shock (or a financial crisis) to global economies and unemployment and inflation do their own things.

    3) Inflation is a nuisance; unemployment wrecks lives? That is so wrong on so many levels. Inflation has far-reaching consequences that effects people's standard of living as much, or more, as joblessness.
  10. cranberry

    cranberry Well-Known Member

    Ragu, sorry, but I don't buy into the idea that runaway inflation -- something you seem to fret much about but which has yet to occur -- is a greater threat to than the unemployment, underemployment, devaluation of assets and rising debt with which people are already struggling. We may be fortunate enough to avoid the pain, but that combination of consequences is destroying hundreds of thousands of lives and families real time.
  11. The Big Ragu

    The Big Ragu Moderator Staff Member

    You added "underemployment, devaluation of assets and rising debt" to something I simply said about unemployment relative to inflation, which conventional economic wisdom suggests inversely correlate (the Philips Curve).

    Since you changed the discussion that way, though, I guess I'll take those things one by one.

    1) Underemployment and unemployment are part and parcel of the same thing. They both signal that the economy is not expanding or is not expanding very quickly. OK. Not sure what that adds.

    2) Devaluation of assets is an accounting term, as far as I know. You'd have to explain what you mean better. Anyone holding any basic commodity right now -- precious metals, various crops, etc. -- is not finding that their investment is devaluing, so I am not really sure how to respond. The commodities markets are actually suggesting that people see inflation coming and prices have been rising accordingly.

    3) Rising debt is an interesting thing to bring up. Consumer debt has actually been declining over the last year or so, but for years and years while our economy overheated, it was rising. Eventually rising debt always brings about saving (when the debt becomes unsustainable), which is what has been happening actually (which is why debt is not rising as you suggested). If that saving isn't translating into investment, which it isn't, by behavior it signifies that people are actually worried about inflation. This is what is killing our policy makers. They are doing everything they can to get people to spend, to try to deal with one side of the problem (economic growth and employment). And people aren't behaving the way the policy is intended to make them, which has the effect of the policy not even having any short-term benefit, and worse, the policy (likely) creating the long-term problem that it should cause (devalued dollar, more government debt [which is an interesting way to try to address consumer debt], inflation, etc). What we are seeing in terms of consumer debt, really makes a case for inflation looming out there. People are BEHAVING as if they are worried about it and policy geared toward getting them to think only in the short run, isn't working.

    Without most people being able to verbalize the concept of inflation the way they can easily identify joblessness vs. having a job, their behavior is telling a story. They're hoarding. Every bit of policy is trying to get them to spend, and instead they are saving. People do that when they are worried about inflation. People worry about inflation, even when they don't realize they are doing it, because it effects standard of living just as much as unemployment. The Philips Curve, which demonstrates the supposedly equal inverse correlation between unemployment and inflation suggests the two things are equally good/bad. Not that unemployment is worse. Otherwise, it would make sense to try to inflate away every problem possible to just keep people employed. No one believes that, even if that is all our public policy ever amounts to, and that is because that policy is politically motivated, not motivated by what is necessarily best for us.

    The only reason people fret more about unemployment than inflation (and they do -- it has been studied extensively) is that it is more readily understandable and people can explain it in three words. Your employment situation is emotional. You know when your alarm clock goes off whether you have a job to go to, and that feels more immediate. But people feel it equally when their standard of living is getting worse because prices are rising--it's just not experienced emotionally the same way, because it's a bit more invisible. You know things aren't good, but the typical person can't identify the culprit the same way they can easily identify a lost job.

    If the inflation you bring on by public policy is a lot worse than the unemployment problem public policy was meant to address, yeah, the inflation hurts people worse than the unemployment would have. That is all I was saying, and it seems like common sense.
  12. cranberry

    cranberry Well-Known Member

    Sorry, I didn't mean "rising debt" so much as rising ratio of debt to (devalued) assets -- home, real estate, retirement portfolios, etc. There's a very real squeeze there even for a lot of people who are still hanging on to jobs. I understand that consumers are (finally) reducing debt as they try to replenish (lost) savings.

    I agree to an extent on the savings-investment quandary but I also think it's foolish policy to try to fuel hyper growth at rates that helped get us into this mess in the first place. The country will be better off economically long-term if consumers shore up their personal finances and gradually increase consumption from a position of strength. It's why I always get annoyed at these "$500 check for everybody" vote-buying/stimulus programs. Everyone runs out and gets a TV, great, but then what?

    While you can probably justify inflation as equally problematic to the overall economy as unemployment, I don't think you give fair consideration to the fact that inflation is a problem whose burden is shared proportionately while joblessness affects a much more narrow swath of people in a more devastating way.

    Sure it's more emotional because it's very real when you can't feed your family or keep your home or pay your electric bill.
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