Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

The Big Secret about Peak Oil and the US Military

Commodities / Crude Oil Jul 11, 2008 - 11:01 AM GMT

By: Mike_Stathis

Commodities Best Financial Markets Analysis ArticleThose of you who do not believe Peak Oil Theory should first make sure you fully understand it. According to this theory, after a reservoir has been depleted by half of its total volume, the output begins to plateau or remain constant for some unknown period. At some later time (which is unpredictable) the output begins a permanent decline of variable duration (which is also unpredictable) until the remaining quantity of oil is no longer economically feasible to extract with current technology. Therefore, Peak Oil Theory does not state that the earth is running out of oil per say. It states that the earth is running out of inexpensive oil, otherwise known as conventional oil – the high-grade oil that comes out by drilling on land and requires minimal refinement costs.


What this means is that we could have enough total oil (conventional plus non-conventional) say for the next 100 years, but that does not matter. What really matters is how much conventional oil reservoirs remain because this is the lowest cost oil to produce. In other words, Peak Oil is concerned with how much crude we can produce and refine per given day per dollar.

The United States reached its peak oil period in the early 1970s. Ever since that time, we have relied more and more on foreign oil imports. Interestingly, since that time we have also relied more and more on imported goods, while both consumer and federal debt have ballooned. According to many independent (and unbiased) oil experts, the world will soon have reached this peak oil period, causing even more dependence on exploration for non-convention oil.

Over the past two decades, new conventional oil finds around the world have been far and few. And what was once thought as large finds have turned out to yield much less than first thought. Throughout this period oil demand has continued to increase. It has especially strengthened over the past few years due to the rapid expansion of Asia .

As demand has increased and new finds have diminished, OPEC has fudged oil reserves data for many years, causing concerns about Peak Oil to remain hidden up until recently. As a result, oil prices have soared. And this has made exploration for non-conventional oil not only more feasible, but mandatory. Consequently, over the past few years, we have become increasingly reliant on more non-conventional oil sources, such as tar and oil sands and deep water drilling. These are considered non-conventional sources because they require large expenditures of money to produce finished petroleum products. These two variables – increased demand and decreased supplies of conventional oil have been the main forces responsible for record oil prices. Over the past year, oil has also risen due to the inflationary effects from the Federal Reserve, which has weakened the dollar. The dollar-oil link explains many things which you were probably unaware of.

Oil industry giants such as Exxon continue to insist that we have plenty of oil for decades, but then add that more investments are needed for offshore exploration. What they are really saying is that higher oil prices are due to Peak Oil – the decline in conventional oil reservoirs, which is forcing companies to focus on non-conventional oil. They use word games to hide the truth because they realize any possibility of Peak Oil will cause a push for alternative energy, which would threaten their monopoly. OPEC plays the same game. Washington goes along with these fantasies as well for a much bigger reason – the preserve the dollar-oil link.

You see folks, as long as the world is dependent on oil, the dollar remains backed by crude since you can only buy it with the dollar (with one rare exception to be mentioned shortly). This dollar-oil link helps keep the dollar as the universal currency. And because the entire world must use the dollar, you can imagine how that dilutes the inflationary effects seen in America due to the Fed's printing presses. Thus, the dollar-oil link ensures the Fed's inflation machine is spread throughout the globe. Without the dollar's link to oil, the inflation seen in America would be much more severe.

This is the secret that virtually no one realizes. It is not a conspiracy. It is a fact. And the few in Washington who realize it are never going to admit it. But consider why it is that America has such good relations with the Saudis. After all, it was President Nixon who negotiated with the Saudi Royal family to demand dollar payments for oil shortly after severing the finally link to the gold standard. Soon after all of OPEC followed suit. In exchange for the dollar-oil link, the Saudi Royal family receives the protection of the U.S. military. This is why the Saudis are rarely criticized by Washington . They have earned a blanket exception for virtually anything they do, including involvement in terrorism and yes, even including holding down oil output.

The Saudis know well that they have a good deal of control over the fate of the U.S. economy. Given the fact that Iran has now created an oil exchange (Iranian Oil Bourse, March 2006) that accepts only the Euro, you should understand why they want nuclear weapons – for protection against a U.S. attack. As Iran realizes, severing the dollar-oil link is the easiest way to destroy the U.S. And any nation that tries to do this will be dealt with accordingly. Saddam Hussein tried to sell oil accepting only the Euro in 2000 and we know what happened to him. As well, any committed push to transition the U.S. into alternative energy threatens to destroy the global enslavement by the dollar-oil link. Alternative energy will come. But it will come slowly and Washington will make sure of this. Incidentally, I discuss this as one of many critical topics in my book “ America 's Financial Apocalypse.”

By Mike Stathis

http://www.apexvc.com

Copyright © 2008. All Rights Reserved. Mike Stathis.

Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.

The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.

Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher. These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.

Requests to the Publisher for permission or further information should be sent to info@apexva.com

Books Published
America's Financial Apocalypse: How to Profit from the Next Great Depression . Condensed Ed. Copyright © 2007.
Cashing in on the Real Estate Bubble . Copyright © 2006.
America's Financial Apocalypse: How to Profit from the Next Great Depression . Copyright © 2006.
The Startup Company Bible for Entrepreneurs: The Complete Guide to Building Successful Companies and Raising Venture Capital . Copyright © 2004 and 2005.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Mike Stathis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Clifford J. Wirth
11 Jul 08, 15:09
Oil Catastrophe is Here NOW !

We are running out of oil. Read this:

Global oil production is now declining, from 85 million barrels per day to 60 million barrels per day by 2015. At the same time demand will increase 14%. This is like a 45% drop in 7 years. No one can reverse this trend, nor can we conserve our way out of this catastrophe. Because the demand for oil is so high, it will always be higher than production; thus the depletion rate will continue until all recoverable oil is extracted.

Alternatives will not even begin to fill the gap. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, train, and mining equipment.

We are facing the collapse of the highways that depend on diesel trucks for maintenance of bridges, cleaning culverts to avoid road washouts, snow plowing, roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, transformers, steel for pylons, and high tension cables, all from far away. With the highways out, there will be no food coming in from "outside," and without the power grid virtually nothing works, including home heating, pumping of gasoline and diesel, airports, communications, and automated systems.

This is documented in a free 48 page report that can be downloaded, website posted, distributed, and emailed: http://www.peakoilassociates.com/POAnalysis.html

Anyone interested in relocating to a nice, pretty, sustainable area?


tom
11 Jul 08, 17:09
Per say?

Is "per say" a spelling variant of "per se"? Or perhaps a double entendre? q.v. -- 5th line down in "The Big Secret...".

Generally interesting article.

BTW, is anyone keeping track of the world distribution of gold and within each country, the distribution between private, corporate, and government ownership?


Half Empty
14 Jul 08, 08:49
New form of recycling?

Once Peak Oil becomes an accepted fact - particularly Saudi Arabia's inability to increase, or possibly even maintain, production - surely the game is up for the old US tactic of using the threat of renewables to keep OPEC in line. There is no question that supply will go down and prices continue to spiral. The new question is: who gets to share the profits.

If I were the US, I would be looking for the oil producers to invest in renewable US energy and new US manufacturing capacity - since the globalised model dies with Peak Oil.

The problem for the administration is getting control of the domestic economy back out of the cold dead hands of vehicle drivers and Wall Street.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules