Bust is sooner than you think....

In retrospect, there was a lot of things going on that could have predicted the bust of the 1980s. Consider the 1973 oil crisis. The oil crisis was not caused in large part by the actions of some country, but by the amount of oil the united states was using versus the supply or output. This lead to peak oil. Every oil company jumped on this as a way to make money.
By the 1980s, America went into an oil glut meaning that the amount of oil in supply exceeded demand.

This was predictable to a certain degree.

However, it seems that this time around America is not headed for peak oil anytime soon. China and India, two major economies, just coming out from a global recession, will keep the price of oil high, with stronger demand coming at least until the next global recession.

The bust will come when the price of oil goes below a certain price, but as I said earlier with the global economies coming back online it wont be anytime soon.

A few points to make, the drilling in Colorado isnt profitable for most companies because the oil is much more expensive to extract from the ground even with advancements in hydraulic fracturing.

The drilling will stop, and the water trucks and mud trucks and frac crews will evaporate, but the production, the oil, will not. Once every well has been fractured the only thing left is to pump it out of the ground. This is where the "bust" will occur. The 1980s boom ended while we were still drilling, even though the oil was still in the ground it was not profitable to extract it.

I think the people in the oil patch and all related jobs need to invest into things innovative such as electric cigs, electric cars and such, thats what im going to do.

 

I've cobbled together some very abbreviated notes. Sorry if it seems lacking.
Again, I'm not here to teach or to convince. Only to point the way. The rest is up to each individual.

The toxic agent in global trade, global banking, and global bond market is the USDollar.
This is more than a currency war, but rather a global currency tumult and transformation, with grand tectonic shifts, on the disruptive path to a return of the Gold Standard.

The USDollar is Dead, right now.
The signs:
1. Feb 2012, China, Japan trade agreement, no USDollar.
2. September 6, 2012, China will buy oil from any country that accepts payment in Chinese money.
3. Sept 7, 2012, China, Russia agree to trade without USDollar.
4. China, Australia trade without USDollar.
5. India, Japan will trade without USDollar.
6. China, India buy oil from Iran, without Dollar.
7. Iran, Russia will trade without USDollar.
8. China, United Arab Emerites trade without USDollar.
9. China, South Africa trade without USDollar.
10. Russia will sell China oil, without USDollar.
11. China, Brazil agreement on currency swap, made in 2005.
12.. Expect South Korea to join forces with the Chinese, as they diversify out of USTBonds.

Another collapse will occur as the dollar dies, in this process. Already, China is trading oil without using the US dollar. Mommar Qaddafi, Saddam Husein and others have died because of their attempt to get away from the biggest bully on the planet.

Already, half of world trade is being conducted in currencies other than the US dollar.

Nations of the world are forming the USDollar alternative on the trade side, not the banking and currency side. Banking will follow trade, a concept that not 2% of American economists understand, or wish to understand. The US Economists are equally culpable for the systemic failure, working side by side with the US bankers.

The Eastern nations are assembling an Eurasian Trade Zone and a central bank (aka Development Fund) with which they will exit the USDollar global reserve standard. In doing so, they will not be required to fill their banking systems any longer with toxic USTBonds. The end of the USDollar as global reserve is near, visible in tangible form. The conversion of USTBonds to Gold will nail the coffin in the isolated USDollar

A checkmate is in progress. The established Eurasian Trade Zone joins the massive Asian continent with a significant portion of the European continent, where three quarters of the world population resides. The trade zone has no visible presence or participation by either the United States or United Kingdom.

Cyprus was not a one-off event, isolated or insignificant. It is a flash point event.
The USDollar is coming home to be buried and devalued.
The USTBond is coming home to be buried and downgraded.
The devaluation will cause severe price inflation and supply shortages for the US Economy.

The dominoes are aligned and ready.

 

Wow man that's pretty scary stuff you are quoting. I do have one question for all the China talk. Have you ever been to China? I've spent some months there, and I don't see a dollar collapse as a possible conclusion. Maybe a shift to a global reserve currency might, maybe, could be in the cards. Now this is the key; only if your willing to Accept the grand new global deal.. =D

I would suggest you look at the region they live in and study the resources they have with in there borders; before making such claims.

Resources ie Oil is what move transportation and goods and just whom is selling oil for Renminbi dollars? Iran can't sell oil for Renminbi, who are they going to pass it off to in the large amounts that governments take in?

There hasn't been a country in the world I can't spend US Dollars worth going too. You may pay a premium; but when I got back with Renminbi or other foreign currency. I couldn't spend them at a place at all. They become a part of the collection of foreign currency's or till I return.

 

I've never been to China.

And, I can not help you.

Pay attention, though. As things unfold, there will come a time, fairly soon, that you will think back on my posts, and consider that you had no ears to hear....

 

So what are we supposed to do...just quit making good money because of what may or may not happen sooner than later?


I don't think so....I'll soak in as much of the good money while it lasts...


One thing I know is that things change...get it while the getting is good then plan your next move...

 

Kind of sums up what we have been saying since the start of this thread. You took it as everyone saying "quit and run"... you were wrong...from the start.

 

I didn't take it wrong...I kept asking what the point of all of the sky is falling rhetoric was for. WE KNOW it will end at some point...so what?


Why keep stating the obvious?

 

Why is it every time I start reading about these New World Order conspiracies, the number of black helicopters hovering over my house increase exponentially? And where did I put my tin foil hat?

On another note, here's an article that I found useful as I plan my next 6 months in the Permian Basin :
http://stateimpact.npr.org/texas/20...l-price-in-2014-effect-on-permian-basin-boom/

 

Chicken Little yelled "the sky is falling!"..... an Ostrich sticks it's head in the sand. Neither is very productive.

I like to be as informed as possible. Apparently other members here do as well. Discussion of ALL the different things that might effect those of us in the industry is worthy (in my opinion). That discussion also helps everyone that reads these forums to stay grounded and keep their eye on the prize.

 

After reading many of the new people to the industry posts, they do not see the obvious, or understand just how quickly the oil patch jobs disappear.

Currently in the Powder river basin fields, ie eastern wy, there are 423 wells drilled, but have not been fracked. A few will still be fracked, and others are under temporary abandonment. The present economy, does not make it viable to bring those wells on line. Another big problem looming its head is take away capacity... a few more massive oil fires from train derailments, and the government will put an end to shipping by rail. And the huge amount of regulations to build new pipelines delay new pipelines for years.