Well, as many U.S. corporations own substantial assets overseas I'm pretty sure you don't have to assume the dollar will recover to find the companies valuable.

Of course, you must look at the reasons people felt currencies that have crashed were worthless. The locals had substantial overseas debt with exhausted reserves. One side of the currency traders could not wait for later to do their transations. In the case of America we do not need to make currency trades in order to service our debt. And since, I suspect, importers would be willing to either delay payment or accept barter transactions until the crisis passed, after the currency market gets sufficiently out of whack (dollar value drops too far) everyone holding dollars will just go home to trade another day.

5/5/2006 10:10:36 PM

I don't think anyone is predicting that the dollar will somehow become worthless. What we are looking at is a 30% - 60% plunge. The point is not that the dollar is not worth anything but that its not worth the inflated price that its now commands.

For the pessimistic perspectic the Nasdaq comparison is usefull. No one ever said that the Daq was worthless just that it shouldn't have been up near 5000. There was a seroius correction and it had serious economic fallouts.

This is the suggested story with the dollar. Not that any of this needs to be bad for the US. The british pound underwent a major correction after Blair pulled out of the Euro, but if anything the UK economy benefited from the correction.

The biggest fear I think is inflation if the dollar slides. Rising prices for Chinese goods could mean substantial price increases here. The FED may choose to react to that by bringing the economy into recession.

In addition the price for oil could rise substantially which some think, though I am not one of them, could have very bad implications.

5/5/2006 11:26:36 PM

1. http://www.msnbc.msn.com/id/4542853/

Quote :

"Opening an Alaska wildlife refuge to oil development would only slightly reduce America’s dependence on imports and would lower oil prices by less than 50 cents a barrel, according to an analysis released Tuesday by the Energy Department. The report, issued by the Energy Information Administration, or EIA, said that if Congress gave the go-ahead to pump oil from Alaska’s Arctic National Wildlife Refuge, the crude could begin flowing by 2013 and reach a peak of 876,000 barrels a day by 2025."

900 K barrels/day by 2025, compared to 22,000 K barrels today we use NOW = insignificant
(in case packboozie was serious..

2. TKE-Teg:

Quote :

"I love how some ppl keep blaming this issue with Iran for the high gas prices. We haven't imported oil from Iran in decades..."

global. market.

[Edited on May 5, 2006 at 11:44 PM. Reason : boozie]

5/5/2006 11:42:21 PM

Quote :

"would lower oil prices by less than 50 cents a barrel"

How the hell does anyone know that?

Look, Dude, prices are high not because the oil costs that much to produce but because we are SHORT on supply. Using the last few years as a guide, our demand for oil at normal prices wants to be 3% higher than it is right now. However, 3% more oil is not available, so oil is $70 a barrel. Using your figures, 900/22000, ANWR would increase the oil supply by 4% at normal market prices. As such, openning ANWR today (which hasn't been built yet, I conceed) would put the market back into surplus, prices would drop back to $25 a barrel and force OPEC to shut production to maintain their price fix.

You see, comparing ANWR to today's consumption is rediculous, we have already satisfied today's consumption through existing production and imports. What we are worried about is fulfilling tomorrow's increased consumption.

5/6/2006 12:55:27 AM

of course there is a little speculative influence on the market - prices going up b/c people *think* there might be supply disruptions .. be it rebel forces in nigeria and chad, tough talk with iran, bombings on saudi facilities ... and that's not going away...

also, even if that weren't the case, no way oil is going to magically drop to $25 a barrel .. that's just bullshit.
---

as far as estimating how much that production would lower oil prices:
if you read the rest of the article, they discuss the fact that those 900K barrels, being 4% of our daily use, would lower our oil imports from 70% of consumption to 66% of consumption. that means that there are 900K more barrels per day on the world market .. in a market of 75,000K barrels per day, that's not much ..
if that explanation doesn't do it for you, look up the Energy Information Administration's report and get it from the source.


but who knows - maybe we'll achieve something substantial with alternative fuels and see oil demand drop by 50% by 2025.. then you'll see your $25/barrel .. maybe lower,

but the lower it goes, the less economical it becomes to supply oil (granted that it's not hard to pump the stuff out of the ground), and perhaps some oil producers would just stop on economics, thus lowering supply a bit - but that's just a hypothesis.

[Edited on May 6, 2006 at 1:44 AM. Reason : ----]

5/6/2006 1:34:24 AM

moop, oil was $23 a barrel just in 2002, it was $12 a barrel in 1998. You don't need to sway the demand/supply charts that much to produce wild price swings. You see, both production and consumption are very inellastic, so when production exceeds demand the price collapses, when the reverse is true the price sky-rockets.

So we don't need to boost production that much to restore normalcy.

And if we cut back oil consumption by 50% as you suggest then the price would more than collapse, it would be down right apocolyptic as oil dropped to around $4 a barrel, the marginal cost of production from an existing oil infrastructure, any less and the oil wells get dug up for scrap metal.

5/6/2006 10:05:48 AM

Quote :

"E-T-H-A-N-O-L it will cure what ails us"

Was this a seriouse post?

5/6/2006 11:35:37 AM

the oil in alaska will never be used. by thte time they decide to use it oil will be useless.

5/6/2006 12:50:51 PM

Too bad the land it is under is home to an abundance of widelife. So how come our need for a finite fossil fuel exceeds that of their habitat?

5/6/2006 1:37:48 PM

We drill in downtown Los Angeles, a place occupied by an abundance of wildlife. Why do you hold elk in upstate Alaska above human life in Los Angeles?

My bigger question is how is drilling in ANWR supposed to kill off the wildlife living there? We have blanketed the Continental united states, a place of much more dense and diverse wildlife and plantlife, with highways, cities, suburbs, factories, damns, etc, with minimal loss of species. We still have deer in downtown Raleigh, what makes ANWR so different that it's version of elk cannot survive the construction of a single highway and pipeline?

5/6/2006 2:49:26 PM

I am pretty sure if we don't care about civilian lives in Iraq, we don't care about wildlife.

5/6/2006 2:55:45 PM

I am pretty sure if we don't care about civilian lives in Iraq, we don't care about wildlife.

5/6/2006 2:56:14 PM

Quote :

"with minimal loss of species."

I am glad to see that you are an expert in this field too.

From everything that has been posted about this in the past ANWR will only be a short term fix and won't even be viable for drilling until several years down the road. Too bad that humans are too myopic to invest in renewables instead of continuing to poke holes in the earth.

5/6/2006 4:14:22 PM

When it comes to the plant and animal life which sustains us, Im comfertable gamling....I mean, id rather be dead then have a slightly weaker economy

5/6/2006 4:28:33 PM

^ What gamble? Who is gambling with anything? Drilling in Alaska is nothing new, we've been doing it for decades. What, do you think the Earth is going to split open and flood the surface with lava or something?

Get over yourself. I have never heard a credible means by which life on this planet is extinguished by something so mundane as economic advancement. I doubt the ecosystem would even notice.

Hell, it turns out that a full nuclear exchange back in 1970 wasn't going to extinguish all life either (nuclear winter turned out to be a fraud), so something tells me drilling a few holes aren't going to kill us either.

5/6/2006 5:28:33 PM

Quote :

"I have never heard a credible means by which life on this planet is extinguished by something so mundane as economic advancement."

becuase you claim that scientific researchers are not interesting in doing research, they just claim global warming is happening so they can get research money, you could neve hear anything credible. your fingers are in your ears.

5/6/2006 5:45:17 PM

I never said global warming was not happening, I merely pointed out that the only scientists claiming the world would end because of it were not-credible.

5/6/2006 9:14:02 PM

About as non-credible as sensationalist economists who claim that unless we drill in Alaska or other sensitive areas right now that our economic security will come to an end?

5/6/2006 11:45:13 PM

^ Exactly, equally as non-credible as those lunatics. The U.S. is a wealthy industrialized country, high oil prices can only have marginally negative effects upon our economy as we are among the most efficient energy consuming countries on the planet and can therefore afford to outbid the poorer competitors when it comes to acquiring energy.

In other-words, if a struggle for energy ensues America/Europe/Japan/etc will win, South-America/Africa/much of Asia will lose.

So, drilling in Alaska isn't going to save the United States; it is going to save the poor of the world.

[Edited on May 7, 2006 at 9:41 AM. Reason : .,.]

5/7/2006 9:41:00 AM

Fuel Bank Offers Gas in Bulk

http://www.foxnews.com/story/0,2933,194595,00.html

ST. CLOUD, Minn. — Most motorists are feeling the pain as gasoline creeps toward, or over, $3 a gallon — but not Art Altrichter.

"This feels pretty good!" Altrichter said as he filled the tank of his Ford F-150 pickup for $2.03 a gallon on Thursday, when the average here was $2.73. "Right now, to be a few pennies over $2, when it's as high as it is? That's a real deal."

A year ago, the retired milk truck driver bought 500 gallons of gas at First Fuel Banks, locking it in at the then-current price of $2.03 a gallon. He taps that reserve whenever gas rises above that mark. If the retail price drops below $2.03, he can leave his reserve alone and buy elsewhere.

First Fuel Banks bills itself as the only retailer in the country where customers can buy gasoline for the future and hedge against rising prices. It advertises no service charge and no storage charge, just a $1 lifetime membership fee.

Altrichter said one of his neighbors got in at First Fuel Banks several years ago and is now is withdrawing from a reserve that cost him 99 cents a gallon. "How about that!" he said.

5/7/2006 11:31:09 PM

Why is it so expensive still??? I assume the blend switch is done, are there any refineries still not back up to speed yet? Is the world demand this year so much higher than last to justify the prices, or is it a little of refinery offline + a little increased world demand over this time last year?

Or...a little of those two + the uncertainty about Iran NK and all the other shit that realistically shouldn't effect oil prices in the long term but does anyway?

7/11/2006 12:09:00 AM

Quote :

"Why is it so expensive still???"

demand is not elastic, and the suppliers profit because of it.

record profits.

7/11/2006 12:35:27 AM

It's just going to stay high.

You'll have to deal with it somehow. Drive a more efficient car or drive an alternate fuel car if you need to do so.

[Edited on July 11, 2006 at 12:49 AM. Reason : d'oh]

7/11/2006 12:49:37 AM

It's the inelasticity of supply, not demand, that is driving up these prices.

7/11/2006 12:52:25 AM

Gasoline is still expensive because oil is still expensive.
Oil is still expensive for the following reasons:
A) demand is still growing fast
B) supply is proving fairly inelastic
C) speculators are predicting a future supply disruption and still have plenty of storage space available (lose either and prices crash quickly)
D) The refinery mix is incorrec as the world has plenty of heavy crude but no heavy refineries to process it, it has plenty of light refineries but no light crude available to process

7/11/2006 1:03:10 AM

Quote :

"Prawn Star: It's the inelasticity of supply, not demand, that is driving up these prices. LoneSnark: supply is proving fairly inelastic"

maybe you fellers ought to brush up on basic supply and demand. it's the DEMAND for oil that exhibits exhibits price inelasticity.

it makes no sense to say that the supply of oil is inelastic. there are still enormous reserves, and production can be (and is) manipulated at any time.

Prawn, do you even know what price inelasticity refers to? Snark, do you just parrot whatever Prawn says?

now lookie here, you two:

-- IF the price of a commodity goes up,
-- AND the demand stays constant
-- THEN the demand is said to be "inelastic".

e.g., the demand has "Price Inelasticity".

as in, "it don't change it none, nohow."

y'all get it now?






[Edited on July 11, 2006 at 1:59 AM. Reason : ]

7/11/2006 1:33:03 AM

ahahahahaha I gotta copy this shit.

Go back to economics 101 you fucking moron.


http://en.wikipedia.org/wiki/Price_elasticity_of_supply

The demand for oil has been growing at a rapid clip for quite a while now. This is not a new development. Demand was just as inelastic 10 years ago as it is today, but you could get gas for 99 cents a gallon back then.

What is new is that the supply is not rising to meet that demand as readily, despite a 700% increase in the price of oil just in this decade. That is where the change has occured.

It used to be that during a worldwide economic boom, OPEC and other suppliers would just increase production to match demand and stabilize prices. This has not happened as of late. Increasing demand for oil is nothing new. The recent inelasticity of oil supplies is what has driven oil prices past $70 per gallon.

[Edited on July 11, 2006 at 2:23 AM. Reason : 2]

7/11/2006 2:20:29 AM

if you think that oil supply is unable to keep up with demand, then youre a fucking idiot.

(1) oil supply is reduced or decreased, thereby increasing the price.

(2) but since people continue buying the same amount of oil,

(3) the suppliers increase their revenue and profits in direct correlation with the price increase.

... and is a textbook example of PRICE INELASTICITY OF DEMAND


so, the suppliers can manipulate the supply, and thus the price, with damn near impunity.

because, since the demand has price inelasticity, INCREASES in the PRICE of oil have practically NO EFFECT on the DEMAND of oil

no matter how much the price of oil increases, PEOPLE STILL BUY IT AT PRACTICALLY THE SAME RATE.

and your pathetic attempt at quoting a Wikipedia article that actually *says nothing*, does not change the fact that you are ignorant and misinformed.




[Edited on July 11, 2006 at 2:32 AM. Reason : ]

7/11/2006 2:28:12 AM

Quote :

"oil supply is kept low to increase the price"

ahahaha, there it comes.

OMFG!!! Big oil companies are manipulating supply to drive up prices!!!

You're even dumber than I thought if you believe that.

Quote :

"if you think that oil supply is unable to keep up with demand, then youre a fucking idiot."

PS you have argued the exact opposite in another thread which shows that you are a goddamn hypocrite and not worthy of my posting time.

7/11/2006 2:31:54 AM

Quote :

"OMFG!!! Big oil companies are manipulating supply to drive up prices!!!"

yeah, like...

thats just crazy.

LOLLERS.

im such a loon.

look out, here come the black helicopters.

Quote :

"you have argued the exact opposite in another thread "

pls to cite reference, kkthx.



[Edited on July 11, 2006 at 2:36 AM. Reason : ]

7/11/2006 2:35:40 AM

-- IF the price of a commodity goes up,
-- AND the demandsupply stays constant
-- THEN the demandsupply is said to be "inelastic".

You know, just as a demand curve can be nearly vertical a supply curve can also be nearly vertical.

Quote :

"oil supply is kept low to increase the price"

Why didn't they do this before? Why not back in '98 when the price was $10 a barrel? Were they stupid back then and just didn't wake-up until recently? "Hey fucks! We should start charging more for this shit."

[Edited on July 11, 2006 at 8:27 AM. Reason : .,.]

7/11/2006 8:26:32 AM

Yeah, but back in '98 if people were complaining about gas at $0.95/g you would have made and answered the "Why didn't they do this before?" question with another "Why not back in '49 when..."

edit: That doesn't make a whole lot of sense but the point is you can't say they aren't taking advantage of the situation now because they weren't taking advantage of it yesterday. There are a myriad of factors that are in motion.

Conditions exist right now that pretty much allow everyone in the industry - from getting it out of the ground right down to putting it in the pumps - to take advantage of the situation.

[Edited on July 11, 2006 at 8:39 AM. Reason : -]

[Edited on July 11, 2006 at 8:42 AM. Reason : -]

7/11/2006 8:39:02 AM

Take advantage of the situation? That is how the game is played, sellers are always jockying for higher prices, buyers are always jockying for lower prices, sometimes they win. No conspiracy is necessary. In fact, ignoring speculators, oil companies MUST be greedy for the system to work. While demand is inellastic it is not perfectly so, thus demand does fall slightly as prices rise. As quantity supplied and demanded must equal we can reasonably say that if prices were forced lower today (keeping everything else equal) then the quantity demanded would be greater than they quantity supplied and we would have shortages.

Oil is still expensive for the following reasons:
A) demand is still growing fast
B) supply is proving fairly inelastic
C) speculators are predicting a future supply disruption and still have plenty of storage space available (lose either and prices fall)
D) The refinery mix is incorrect as the world has plenty of heavy crude but no heavy refineries to process it, it has plenty of light refineries but no light crude available to process

7/11/2006 8:50:06 AM

Supply only /appears/ to be inelastic because the suppliers are intentionally throttling the production. this is not inelasticity, this is market manipulation.

Demand /IS/ inelastic -- at least in the short term -- because consumers are locked into a cycle of dependency on the commodity, that forces them to cough up market price of the commodity, even if the price is manipulated by the suppliers.

the only way to bring down oil prices in the long term is to QUIT BUYING IT.

as in: take the bus and/or ride your fucking bicycle. when you absolutely have to drive a car to go see grandma, drive a Prius or something similar.

7/11/2006 10:15:52 AM

Quote :

"Supply only /appears/ to be inelastic because the suppliers are intentionally throttling the production."

Why?

And where is the evidence? World oil production since 2002 is up 9.6%, not what you would expect if the oil industry is throttling production.

http://www.eia.doe.gov/ipm/supply.html

[Edited on July 11, 2006 at 12:49 PM. Reason : link]

7/11/2006 12:47:18 PM

Quote :

"Supply only /appears/ to be inelastic because the suppliers are intentionally throttling the production. this is not inelasticity, this is market manipulation."

Clearly, the price of oil is traditionally manipulated by the actions of OPEC in general and Saudi Arabia in particular.

However, it would be a mistake to think that the supply of oil is elastic over a range much higher than what is being pumped today.

Saudi Arabia has very little excess capacity and most of the rest of the world is pumping at full speed This is what is increasing the speculative demand for oil. A large disruption in supply could cause a quite price inelastic demand and completely price inelastic supply to pull apart. The resulting price could be astronomical.

7/11/2006 3:35:12 PM

Have the Oil infastructures being built by Russia come online yet?

There are some beastly reserves in that country.

7/11/2006 3:50:57 PM

The place I get gas at was $0.04/g cheaper this morning. The price of a barrel of oil must have been slashed by $50/b or something.

7/12/2006 7:28:40 AM

7/12/2006 10:40:07 AM

So, in Jan/Feb of this year, oil spiked up to around $68 with a resulting bump in gas prices in NYC to around $1.75.

Since May, oil has hovered around the ~$70 range yet gas has shifted up to around $2 a gallon. Why?

7/12/2006 1:24:24 PM

North Korea launched that missile... and its summer - gas should cost more. [/sarcasm]

7/12/2006 1:36:23 PM

^^ are you looking at a different graph? From where I am sitting the two appear to follow each other up and down.

7/12/2006 2:41:43 PM

Yae, I think I was a bit hasty trying to match up dates on those charts. It makes sense now.


But anyway, prices continuing to rise. Where are we (the world) putting all this oil into storage that they are demanding.

7/17/2006 10:04:53 AM

ya know, if them damn idiots would just put vents on volcanos and use the steam energy we wouldnt have these problems

7/17/2006 10:25:11 AM

Well I guess we all know 0EPII1's priorities:

"Sure, I live in a country where things are arbitrarily decided by royal decree, and sure, the vast majority of the country is poor and oppressed, but I'm making bank here, so don't tell me your country is better."

The sick irony of that being that he's only making bank because the American education system is one of the many, many things better about this country.

Please, 0EPII1, list some of the categories in which Saudi Arabia beats us out, other than your personal financial benefit.

7/17/2006 11:13:30 AM

Would not Saudi Arabia be better off keeping gas prices at the world-price and using the money raised/saved to better educate their citizens?

Or maybe use it to fight world hunger.

Why do the comfortably well off citizens of Saudi Arabia deserve the money more than the poor?

I have the same question for India which spends 5% of its annual GDP subsidizing diesel and gasoline. Poor indians don't buy the stuff, and the well off don't need it, so why not spend the money on something else?

It damn sure is not to prevent higher food prices. Here in America the price of diesel has gone up five fold in the past 8 years, meanwhile the wholesale price of food has gone up only 1.9% in the last year, clearly energy prices are not a big influence on the poor non-car owning public. If India, Saudi Arabia, or America for that matter, really wants to help the poor it should allow gas prices to rise or even raise taxes on it and either give them the money or pay them in kind (perhaps gasoline stamps to go along with their food stamps).

http://www.bls.gov/news.release/cpi.nr0.htm
(don't have the link for India, but Indonesia is another example of a poor Asian country bankrupting itself to help the country's rich afford gasoline).

[Edited on July 17, 2006 at 12:58 PM. Reason : .,.]

7/17/2006 12:50:55 PM

Quote :

"C) speculators are predicting a future supply disruption and still have plenty of storage space available"

in other words....

supply and demand dont set the world oil price, a bunch of criminal spectators do.

7/17/2006 1:39:31 PM

Well, if there really are places to store this stuff, then supply/demand still makes sense. But I have never read anywhere or seen any type of evidence that the world has massive amounts of oil storage locations that we are trying to fill in parallel to the normal demand.

7/17/2006 1:52:06 PM

^ The most commonly known would be the "Strategic Petroleum Reserve" being held by the United States which until just recently was being filled at a rate of thousands of barrels a day. Conversely, there are many other countries that have similar reserves as well as other products (such as gasoline).

Of course, Governments are not the only people with an interest in commodities. For example, if you expect oil to become scarce in the future then you should stockpile oil today for sale in the future, an act of stockpiling. This activity only makes sense if you believe oil supplies are at risk. Then again, as I stated above, there are many situations making surplus capacity hard to come by, making it very difficult to build inventories regardless of how much you want them.

Contrary to what Josh8315 attempted to say, such behavior is neither "criminal" nor damaging to the rest of society. More accurately, such behavior is necessary for the smooth operation of any sufficiently large marketplace. You see, in a free-enterprise system, prices are signals reflecting relative scarcity. If you believe oil is a limited resource and prone to interruptions then you will stockpile it because the price will spike in the future. This has two effects: primarily, in a future time of shortage the oil you stockpiled will be available on the market, moderating prices and reducing the hardship inflicted; secondly, by bidding up prices today you send a message to oil consumers to conserve oil and oil producers to produce more oil, again lessening the future price spike and reducing the hardship inflicted.


As you can see U.S. inventories were knocked down by hurricanes and consumption in 2005. Now that war is breaking out in the middle east market actors realize there is probably not enough stockpiled to fill potential gaps (at least until government stockpiles can be tapped). As such, speculators are again clamoring to drive inventories higher.

[Edited on July 17, 2006 at 4:05 PM. Reason : .,.]

7/17/2006 4:02:03 PM

Quote :

"list some of the categories in which Saudi Arabia beats us out, other than your personal financial benefit."

5 wives legally allowed
incentives for converting to Islam
Free education
free healthcare
cheap oil
women treated like scum
no freedom to drink or eat in public during ramadan
forced closing of businesses during prayer times.


etc.

[Edited on July 17, 2006 at 4:07 PM. Reason : .]

7/17/2006 4:05:31 PM