Quote from Golden Oxen (www.theautomaticearth.com/you-thought-the-saudis-were-kidding):
"My gut feeling is the Saudi’s have very little to do with all this."
"We are witnessing a world wide economic contraction that is accelerating in my opinion and all the jibber jabber and phoney numbers are mere noise that confuse the issue."
"The damage that has been done to the minds of the worlds middle class by all this talk of buy ins, pension cuts, negative interest rates etc as well as fears of job stability are never talked about but have taken a major toll on confidence."
"Expecting big trouble after the holidays."
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What the Saudi Royals are doing is destroying the U.S.A.'s ability to finance the access and pumping of petroleum and natural gas from shale sources. It is too expensive to extract, and can not compete with $20 a barrel petroleum from Saudi Arabian oil fields.
For the past 6 years there have been zero wait times to get in to Outback or Red Lobster. Now the wait can be 1 hour or more on a week night and forget about it on a Friday or Saturday unless you get there at 3 PM or after 8 PM!
No plan survives first contact with the enemy. That enemy is Iran. This OPEC move is a Saudi attack on Iran and Russia. Any damage done to US fracking is incidental. If Iran gets their nuke, their first move will be to shut down all Saudi oil exports, which must exit through the Striates of Hormuz and the Red Sea. They have an estimated 70,000 mines with which to do it. The Russians will help and the US will do nothing. Oil will cost whatever the Russians and Iran say it costs.
The Soddies can play this game because their oil is the cheapest in the world to extract.
Drivel. Things are never as great as the optimists always say and things are neveras bad as people say they will get.
Funny how the article doesnt point out that demand for oil is still increasing...and it talks about T. Boone Pickens but It doesnt point out that he Is saying oil prices of $90-100 within 12 months. Probably too optimistic. Stupid articles like this help nothing.
Now do I beleive the 5% GDP number? No but do I believe our economy is growing? Yes. It is doing so because of all the great Americans getting up every day and going to work in spite of this governement.
Just wait till the Saudis start fracking.
It won’t stay that low for long ... and ... the article states that the shale oil can be turned on and off, as needed, and as prices climb and/or fluctuate.
“Although shale oil is relatively costly, production can be turned on and off much more easily – and cheaply – than from conventional oilfields. This means that shale prospectors should now be the “swing producers” in global oil markets instead of the Saudis.”
Just a little restructuring before the next ice age kicks in.
Remember that Obama and the dims lie about everything...including global warming.
Putin might “accidentally” drop some mines in the straits of hormuz. Some mines with the wrong return address.
The decrease in oil will help jump start the world's economies and greatly reduce prices across the board. Areas involved with oil production will have issues, though.
In the end, demand reduction coupled with our fracking boom is what destroyed OPEC and deflated enviro-wackos’ egos for the non-cost effective energy alternatives.
This article could have gotten the message across with 20% of the words used.
Ping.
Thought you two would like to read this. It doesn’t get a lot of interest from Freepers, but the readers of RIM and those on ZeroHedge were very concerned.
There are a lot of big players upset about the Saudis actions here. Iran's first nuke may not be pointed at Israel when it launches. As for the Russians, some of their warheads may not be properly accounted for. That Saudi oil would not be worth .20 cents a barrel if it becomes irradiated overnight.
As terrible as the prospect of feeling the full brunt of the depression that we've seen signs of coming the past 6 years would be, it is far worse for other nations. Worse, they value human life far less than we do and would be less hesitant to embrace extreme solutions.
Interestingly enough, I found an article that supports my own speculation at this (safe) link:
Love the Automatic Earth blog.
They aggregate a lot of media about energy/finance but the main bloggers there also have original content that is quite insightful.
Thanks for posting