Post by jeffolie on Jan 12, 2012 17:50:30 GMT -6
Oil to $30 .... If you accept the thinking in the below piece that a collapse of commodities including oil, will happen because of a collapse of China ... then a 70% decline to the extremely long term botton of a trend would give one an oil price of $30.
I do expect China to collapse ... when the Dollar collapses in 2014 and/or beyond. China's biggest buyer is the combined Europe which may soon be labelled as in decline, a recession.
Nat Gas ... shale, fracking, hydraulic drilling now continues to drive down Nat Gas prices to below $3.00 ... some manufacturing and electrical production will shift from other sources to Nat Gas at below $3.00, more will shift as if goes lower. Nat Gas will drive down oil prices if new laws, regulations, political actions do not restrict the current trend to produce more Nat Gas.
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Nero (Iran) Fiddles While Rome (China) Burns
What is required for a whopper of a secular bear market is for most market participants to believe the positive side of the story all the way down. We believe that all the pieces are in place for commodities to suffer a multi-year bear market which will wipe out up to 70% of peak prices on most major commodities. We want to make sure everyone sees the potential for a massive reversion to the mean. In our opinion, the recession coming in Chinas economy will break the back of oil prices for decades. Lower oil prices could strip the economic relevance of Iran, Saudi Arabia, Syria and Yemen.
Nero (Iran) Fiddles While Rome (China) Burns by Bill Smead of Smead Capital Management advisorperspectives.com/commentaries/smead_11012.php
I do expect China to collapse ... when the Dollar collapses in 2014 and/or beyond. China's biggest buyer is the combined Europe which may soon be labelled as in decline, a recession.
Nat Gas ... shale, fracking, hydraulic drilling now continues to drive down Nat Gas prices to below $3.00 ... some manufacturing and electrical production will shift from other sources to Nat Gas at below $3.00, more will shift as if goes lower. Nat Gas will drive down oil prices if new laws, regulations, political actions do not restrict the current trend to produce more Nat Gas.
=====================================
Nero (Iran) Fiddles While Rome (China) Burns
What is required for a whopper of a secular bear market is for most market participants to believe the positive side of the story all the way down. We believe that all the pieces are in place for commodities to suffer a multi-year bear market which will wipe out up to 70% of peak prices on most major commodities. We want to make sure everyone sees the potential for a massive reversion to the mean. In our opinion, the recession coming in Chinas economy will break the back of oil prices for decades. Lower oil prices could strip the economic relevance of Iran, Saudi Arabia, Syria and Yemen.
Nero (Iran) Fiddles While Rome (China) Burns by Bill Smead of Smead Capital Management advisorperspectives.com/commentaries/smead_11012.php