Most oil fields are now rapidly depleting and require constant drilling to maintain output. Low oil prices and a lack of credit has halted much of the ongoing oil exploration needed to maintain a constant output.

As soon as drilling stops supply starts to fall by almost double digits year to year. Expect oil to go through the roof after a recovery, and stay there for quite some time, drilling takes time, supply can’t be ramped back up to 2008 levels over night, if ever.

http://tinyurl.com/65yh8m

Deflation is typically a symptom of a sick monetary policy just as inflation usually is.

Deflation is not bad if you’re prepared for it.

And we were warned years ago of this happening. Instead, most people chose to listen to the government because, well, “they know what’s good for us.” This is what happens when people let other people do their thinking for them.

And that’s how the US economy is being milked for all its worth, by the fat cats. The lower and middle class and their property are the Leprechauns. And all is being reduced a bit in worth, in a kind of manipulation trick, to create new wealth for those doing the manipulations. The reason very little (if any) new real wealth is being created. Is that there are no “new worlds” and their peoples, to be exploited. So it’s just the hard work and sweat of six billion humans, that can be tapped for the benefit of a thousand or so super rich “investors”. Who create the instruments they invest in. And set their worth for the rest of us to trade our hard earned capital for. And then they clean out these instruments (devalue) for their own gain. And act as if it’s all a surprise to then too. It’s all a big shell game. And only the least skilled, like Bernie Madoff, every get caught.

Its simple: Money is Debt, debt is being destroyed by loan defaults, ergo the deflationary recession we are in now.

When banks are unwilling to make loans and create money via debt, the historically proven fix is for government to spend money via fiat money. In other words Obama is right!

As to the oil topic at hand. Oil Prices are a reliable predictor of global recessions.

Maybe that helped bring about the economic collapse: In the 1990s .com stocks boom and bust, 2000s real estate boom and bust. Then oil, natural gas and other commodities collapsed and there was nowhere to put the money.

Gasoline prices started going up earlier this year apparently due to the fact that cheaper west Texas crude is unavailable to many refineries in the East and they had to import the more expensive oils. Instead of “Drill baby, drill!” maybe it should be “Pipeline baby, pipeline!”

Many predict hyper inflation…more bubbles…as the trillions they printed and distributed…come back to buy…before the money is worthless.

Oil Prices Are All Speculation

http://www.businessweek.com/lifestyle/content/jun2008/bw20080626_022098.htm

“The most surprising e-mail came from Chris Cook, a former director of the London Petroleum Exchange—now ICE Futures Europe. Cook wrote: “I am convinced there has been manipulation of the Brent Complex [the term that defines North Sea Brent crude prices] by ICE members for the last 10 years at least. I think it is quite likely that the Brent forward price is being kept artificially high—which does require deep pockets and accounts for the continuing barrage of Goldman [Sachs] forecasts and much of the other oil market hype that passes for news.”

Think about what Mr. Cook said: “Oil market hype that passes for news.” That sums up what you hear and read daily about oil.

Since the publication of those columns, however, four senators have introduced legislation to “close the London Loophole Act,” which in fact validates the reporting. Also worth noting is that, according to the London Financial Times, ICE Futures Europe “bowed last week to pressure to introduce position limits for speculative traders.” Jeffrey Sprecher, CEO of Intercontinental Exchange (ICE), was quoted in that article as saying: “At some point, some of the extreme proposals in the Congress would drive the business out of the U.S. There’s no question in my mind that the capital flows and trading behavior will move quickly offshore.”

Let me translate that, too: If we move to bring sanity to the commodity markets, then those markets will simply go do business where our federal regulators can’t touch them.

And so, while our Energy Secretary continues to blame America’s oil crisis solely on supply and demand instead of speculators, much as Dick Cheney blamed California instead of Enron in 2001, it takes little research to verify that no one yet has been denied an oil contract—and in fact, refiners around the world are today turning down oil they’re being offered.

One last thought on speculation in the oil market. In 2006, 100% of those who purchased oil contracts lost money because of the market’s contango (meaning spot oil prices were less than the contracted price on the date of delivery). In the fall of that year, when banks started demanding that margins be paid on those losing contracts, oil collapsed back to nearly $50 a barrel. In only 18 months, we’ve forgotten that lesson, too.”

Feds Probe Possible Oil Price Manipulation
Gov’t Reveals Wide-Ranging Investigation Of U.S. Oil Markets Began 6 Months Ago

WASHINGTON, May 29, 2008

http://www.cbsnews.com/stories/2008/05/29/business/main4136490.shtml?source=RSSattr=HOME_4136490

“The Commodity Futures Trading Commission on Thursday said it started the probe in December and took the unusual step of publicizing it “because of today’s unprecedented market conditions.”

So sorry, your government is OWNED… just not by YOU. So feel free to vote for the puppet lackey of your choice.

Oil Is Plentiful, Demand Weak. Why Are Gas Prices Going Up?

http://news.yahoo.com/s/time/20090529/wl_time/08599190144600

is just more “Move along, nothing to see here” mass media garbage written by the clueless in accordance with the statements made by some “expert,” but this one line gives the major part of the reason oil is going up again through exactly the same mechanism that pushed prices so insanely high before:

“Over the past two months, investors have plowed billions of dollars into oil futures.”

In other words, the graph probably doesn’t match the current story.

http://eia.doe.gov/oil_gas/petroleum/info_glance/grprrets.gif

If you believe there is an “anti-christ” then you believe in a fairy tale already.