Oil is crashing?
How low will it go?
So... where is the bottom?
In 2009, it was around $40... Personally, I don’t think we get that low again. But, I think we do venture below $50 for a little while. If it hit $45, I’m going to be buying oil and chemical stocks in a big way.
Well... Big for ME, anyway.
Its not just oil. Its nearly all commodities. The fact is that the demand is down since the world is in a huge economic downturn. China sits on the granddaddy of all real estate bubbles. The reality od squandered capital used to make useless and non productive edifices is dragging down the Chinese economy. The foundation of the US pseudo recovery is borrowed and printed money. That fact and an additional $80 trillion of unfunded liabilities and a bizarre anti energy crusade does not bode well. The Mideast is in chaos and non productive. The French are upset that North Africa no longer has the money to import its grain. Socialist Europe is perennially stagnant and in debt. Africa remains an economic basket case. Long time before there is a robust demand for oil.
Now is the time to build up US strategic stockpile reserves by buying from US producers. We’d be foolish not to do this since we need those stocks. We need them to protect our freedom and our defense. The price is a good buy and will save tax payers money. Buying now from our producers will help keep our producers producing and employed, keep our investors earning from those investments, and will force OPEC to continue its pumping at high levels. If OPEC wants to break US producers, they’ll have to continue their pumping for a longer time. And best of all the US consumer will win too.
Our perspective is so short term that we keep thinking that despots and regulators hold sway. Despite their best efforts, the free market works and a true price will win out, but not without cries of disparity, demagoguery, wringing of hands and down right cheating.
The market always over-swings in both directions during a correction. It’s wonderful to catch it before it swings back.
In the midst of 0’s agenda to destroy our country, he will still try to take credit for this boon to our economy. It’s going to be interesting to see HOW he tries to pull it off.