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Ready for $262/barrel oil?
yahoo ^ | 1-27-06

Posted on 01/27/2006 5:23:10 PM PST by LouAvul

DAVOS, Switzerland (FORTUNE) - Be afraid. Be very afraid.

That's the message from two of the world's most successful investors on the topic of high oil prices. One of them, Hermitage Capital's Bill Browder, has outlined six scenarios that could take oil up to a downright terrifying $262 a barrel.

The other, billionaire investor George Soros, wouldn't make any specific predictions about prices. But as a legendary commodities player, it's worth paying heed to the words of the man who once took on the Bank of England -- and won. "I'm very worried about the supply-demand balance, which is very tight," Soros says.

"U.S. power and influence has declined precipitously because of Iraq and the war on terror and that creates an incentive for anyone who wants to make trouble to go ahead and make it." As an example, Soros pointed to the regime in Iran, which is heading towards a confrontation with the West over its nuclear power program and doesn't show any signs of compromising. "Iran is on a collision course and I have a difficulty seeing how such a collision can be avoided," he says.

Another emboldened troublemaker is Russian president Vladimir Putin, Soros said, citing Putin's recent decision to briefly shut the supply of natural gas to Ukraine. The only bit of optimism Soros could offer was that the next 12 months would be most dangerous in terms of any price shocks, because beginning in 2007 he predicts new oil supplies will come online.

(Excerpt) Read more at money.cnn.com ...


TOPICS: Business/Economy
KEYWORDS: arabs; bric; china; cis; coldwar2; communism; davos; energy; gasprices; gulfwariii; india; iraq; islamofascism; israel; kgb; libya; norigs; oil; oilembargo; opec; plentyoil; putinoil; russia; russianoil; saudiarabia; sco; soros; sovietunion; syria; terrorism; ussr; venezuela; waronterror; wot
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To: Thunder90

Any major country (aside from russia) not hoarding oil is crazy.


361 posted on 01/28/2006 6:48:37 PM PST by WoofDog123
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To: Thunder90
"Ahhem... A really pissed off new Soviet Union, China and India would come after us if we did that."

It's a chance we'd have to take; Even their economies would result in chaos with $262 barrels of oil.

362 posted on 01/28/2006 6:49:46 PM PST by F16Fighter
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To: F16Fighter

i worry that dollar savings at market interest rates will lose real buying power so quickly over the next 10-20 years that what is left will be a mere fraction of what it is today. I have worried about this setting up trusts that might have a lifetime of 20+ years, and see no easy way around it.


363 posted on 01/28/2006 6:50:10 PM PST by WoofDog123
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To: WoofDog123
"i worry that dollar savings at market interest rates will lose real buying power so quickly over the next 10-20 years that what is left will be a mere fraction of what it is today."

It appears we're set up for inflation, if not a mini-depression.

Home prices can NOT keep rising, while if the interest rates go up to 10%, the RE market will plunge.

The good news will be money markets making a come back.

364 posted on 01/28/2006 6:56:26 PM PST by F16Fighter
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To: Paul_Denton

If we go to war with China the first thing we'll have to do is take back the Panama Canal


365 posted on 01/28/2006 6:58:25 PM PST by ichabod_65
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To: ichabod_65

"If we go to war with China the first thing we'll have to do is take back the Panama Canal

"

Why? It is a big ditch with 3 locks. Whether panama or the US own it makes very little difference, espeicially since there would be US forces in the area regardless. Thera are always US forces in the area, one does not need non-public knowledge to see the number of GI's in Panama city to figure this out.

There is a crowd that claims that china own/runs/manages/ the canal, and a sub-set that claims there are thousands of chinese troops hidden in panama, but the first has been mis-led and the second is in gross error.


366 posted on 01/28/2006 7:11:21 PM PST by WoofDog123
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To: ichabod_65
I will add that a lot of folks worry about turning the canal over to panama but the REAL issue which almost none mention was the loss of Howard AFB and Fort Sherman, for different reasons. Howard ran a ton of interdiction plus who-knows-what-else flights and Fort Sherman was the Jungle Operations Training Batallion location, which apparently was a problem to replace (I don't know what they did to replace sherman, but a base in ecuador near guayaquil, Manta, was upgraded for american use.)


367 posted on 01/28/2006 7:17:29 PM PST by WoofDog123
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To: M. Dodge Thomas

"You are talking about microeconomic theory; I’m taking about economic reality."

Sorry you cannot split the two. No more than you can split theory of fluid dynamics from flight.


368 posted on 01/28/2006 7:18:58 PM PST by Sunnyflorida
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To: RightWhale

Thanks. I'm not sure just what a troll is. I see the term and but have not dialed it in.
Certainly putting more taxes on energy is not going to help anything. Seems like something a democratic socialist would suggest.


369 posted on 01/28/2006 7:22:23 PM PST by Sunnyflorida
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To: fallujah-nuker
Thanks for the explanation of troll. I was not inferring, I was asking.

I understand you political argument. There is a lot to loath in radical islamism. They way they treat women for one thing. The hatred of Jews is the second.

But I do not agree with your economic argument. Putting a tariff on imported oil will not punish any one but the people that put the tariffs on. If ME oil goes up in price so does it all. Oil is a completely fungible commodity. The US ships oil to Asia and buys from Latin America because that is the most cost effective model.
370 posted on 01/28/2006 7:33:53 PM PST by Sunnyflorida
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To: RightWhale

"Big Oil is already the major player in solar cells"

I have not looked at fillings to see the real extent. I have just assumed the eco-friendly activities are just PR or MAYBE a hedge. I would if I was them can't hurt the share holders.


371 posted on 01/28/2006 7:36:48 PM PST by Sunnyflorida
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To: WoofDog123

I don't think that all these news outlets are in cahoots to spread misinformation over a Chinese company with ties to the Chinese military running the ports of the Panama Canal.

http://www.tysknews.com/Depts/New_World_Order/china_company_grabs_power.htm

http://www.newsmax.com/articles/?a=2000/4/5/80227

http://www.latinbusinesschronicle.com/reports/reports/0106/panamajack.htm

http://news.bbc.co.uk/1/hi/world/americas/553979.stm

http://www.centerforsecuritypolicy.org/index.jsp?section=papers&code=99-F_18

http://www.worldtribune.com/worldtribune/m-5.html

Also note the downplay by Clinton over the deal.


372 posted on 01/28/2006 7:40:03 PM PST by ichabod_65
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To: RightWhale

"If you see lightning bolts, cats and kittens, often with Viking helmets, it is a troll who got zotted. "

If I may, what is the connection to cats? I seem 'em alk the time around here. there is one that pops up with Viking horns once in awhile.

With FNC gone completely off the deep end, I tend to look at FR first for news. Most is pretty good. Economics is not a strong point on this site. In fact finding competent economics news is very hard. Rueters is so bad it wants to make me puke.


373 posted on 01/28/2006 7:41:18 PM PST by Sunnyflorida
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To: Sunnyflorida
If I may, what is the connection to cats? I seem 'em alk the time around here. there is one that pops up with Viking horns once in awhile.

The Cult of the Viking Kitties

374 posted on 01/28/2006 7:55:20 PM PST by thackney (life is fragile, handle with prayer)
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To: ichabod_65; GatĂșn(CraigIsaMangoTreeLawyer)

H-W owns the leases on balboa and cristobal ports, and apparently won the leases corruptly (surprise). I had heard they tried to get Rodman docks but am not up to date on how that worked out. It certainly stands to reason H-W will have an accomodating relationship with the PRC/PLA.

These ports are not part of the panama canal. Cristobal port (the main one) is fairly far from gatun locks, while balboa port is quite close to Miraflores locks.

The major, honest confusion among posters here is that running these ports mean you somehow have anything to do with canal ownership, land, administration or operations. None of the above it true. The ACP is essentially identical to the panama canal commission it replaced, with some more local corruption/color starting to pop up.

At the time clinton made his remark, china had apparently bought the then-current government of panama, had wholesale people-smuggling in operation, but a lot of that seems to have quieted down under the follwing 2 governments. Whatever geopolitical influence china has in panama, his remark was inaccurate. I have wondered if he was only cursorily briefed on the topic and made the same erroneous assumption many here do.

i have read some of the allegations that law 5 given H-W various rights that look bad, and cannot verify much of this, particularly the part about the pilots, despite several years of asking, including commission employees. If Panama Ports/HW is running the pilots no one, including the pilots, know about it.

The best way to judge, of course, is come to Panama. See the secret china ports, and judge for yourself. That will take a few hours if you do Cristobal as well, then you can have fun the rest of your vacation while you wander in teh streets and run into american soldiers EVERYWHERE.


375 posted on 01/28/2006 8:03:10 PM PST by WoofDog123
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To: SauronOfMordor

"What's needed is a tariff on imported oil, to permanently change the economics in favor of domestic production"

I agree. IMHO we need a $15-20 per barrel oil import fee.

Many pluses:
1. money raised can be used to support alternatives, like nuclear power.
2. Domestic shale oil can be guaranteed to be competititive and we will have a path to energy independence.
3. encourages domestic supply.
4. encourages via higher pricing energy conservation.


376 posted on 01/28/2006 8:20:39 PM PST by WOSG
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To: Sunnyflorida

"Our price goes up but everybody else in the world gets it cheaper. Plus domestic prices go up also, just so the government gets more money? Explain why that is a good thing?
"

Right now OPEC is engineering the cost of oil via their own supply levels, and given strong demand can continue to do so.
By putting in a tariff we reduce the fraction of oil price going overseas and increase the fraction kept at home.

In other words, by increasing our tax, we can reduce the OPEC tax. I'd guesstimate that a US oil import tariff of $15-20 would be good enough to drive price of a barrel of oil down $5-10 just by itself.

The other good effects are mentioned in my previous
- it will help us move towards energy independence, since an oil import tariff will ensure projects like oil shale will not become uncompetitive should OPEC decide to drive oil back under $25.

Of all taxes, a tax on a consumption item that is 70% imported is least onerous to our economy. Balance it with tax cuts on payroll (SocSec and income tax rate cuts) and you have a win/win/win.


377 posted on 01/28/2006 8:27:53 PM PST by WOSG
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To: Sunnyflorida

Having a negative cash flow for the past three months kind of ruled out the idea of options trading, not that the idea would have occurred to me anyway. Conveniently, the ability to heat with wood came just as my wife lost her job, but this is something I've been planning to do for a long time. Through a lot of hard work of my wife's part in starting a freelance business, and some long overdue changes in our spending habits, it looks like we've turned the corner.

The stove cost me $200, so depeciation is not worth the effort. So far this year I've secured about 4 cords at a total out of pocket cost of $250 and about 40 hours of work. Next year my cost should be about $50, and the time input should be about half. Between December and April my oil cost was typically $1200.

Right now the value of the learning experience is high.


378 posted on 01/28/2006 8:30:41 PM PST by Jack of all Trades (Never underestimate the speed in which the thin veneer of civilization can be stripped away.)
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To: Sunnyflorida

"Is this what is know of as a troll?"

No!

I'm a hard-core supply-side Reagan anti-tax Conservative.
The ONLY tax I favor increasing is the oil import tariff.

Tariffs are a better form of taxation, hitting consumption of imported products, than income taxes and payrolls taxes (which hits production). The oil tariff is particularly suitable for several reasons cited in previous replies.

If we want to have full energy independence, here is how to do it:
1. build 400 nuclear power plants and use nuclear power to supply most of our electricity.
2. Have a $20+ oil import tariff.
3. Encourage domestic supply and production via #2 and via changing govt policies on offshore, ANWR, and govt land drilling for oil and gas.
4. Encourage conservation and energy efficiency - higher gas and oil taxes is the most direct way to discourage consumption. gas tax of 50 cents or more.
5. move from using oil for transport to using electricity by using plug-in- hybrid electric vehicles as a solution.

If we want energy independence, we will need to raise the consumer's cost of gas to encourage conservation, fuel switching, etc. Raise it high enough so that electricity is cheaper and peple will switch.

The political and economic benefits of energy independence will outweigh the costs of such taxes.


379 posted on 01/28/2006 8:36:30 PM PST by WOSG
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To: fallujah-nuker

"In peacetime prior to 9-11 the US spent sixty billion dollars per year to ensure the free flow of oil from the Mideast, one dollar in five spent for defense went for that. This amounts to a subsidy of oil from the Mideast, even though we ourselves get most of our imports from elsewhere. Shutting off the Persian Gulf would cause oil that flows to the US to be bid up so we have no choice.

It ends up that in peacetime we subsidized oil imports by $15 per bbl, a tariff would collect the cost of this subsidy from the point were the cost is incurred. When you subsidize the production of illegitimate babies through the welfare state you end up with a bunch of illegitimate babies. Subsidize oil imports and we end up dependent on imported oil."

Interesting argument.

I dont buy at all the 'war of oil' garbage of the left,
but it is true that oil dependency is limiting our options in dealing with Iran.

That is a cost that is incalculable relative to the costs of tariffs.

Beyond that, the economic harm of sending $200 billion overseas each year needs to be considered. Oil dependency is making America a weaker nation politically and economically, and our military costs to preserve mideast oil flow is just a part of the price we are paying.


380 posted on 01/28/2006 8:40:32 PM PST by WOSG
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