Sunday, June 26, 2005

stick 'em up, unocal

energy bulletin \ China throws down gauntlet to USA Inc
If you want to understand the global economy and feel the pulse of capitalism in the early 21st century, look no further than the $19 billion bid by the China National Oil Operating Company - Cnooc - for Unocal of California. Add a large measure of geopolitical tension, and you have probably the single most important corporate event of the young millennium.

I agree. And if Chevron or some other `white hat' should scrape together a competitive bid -- watch China bump the cash up -- 25 billion, 30 Billion, higher.

Too much? I don't think so, Kemo-Sabe.

What is a dollar really worth? Compared to something real, like oil. Clue: Nothing. The value of the U.S. dollar is an anachronism, shortly to evaporate. China has multi-billions of U.S.A. dollars to burn. They know who is propping up the American economy. And they are making their play at the same time. No surprise.

China has Uncle Sam over a barrel, and George Bush is goofing around in Iraq. It brings to mind Rick Moranis playing with action figures of his enemies in Spaceballs. Oh and Congress wants to sue the pushers. Might just as well sue the knife that butters our bread. These clowns will all be in the history books, and not in a good way.

Time grows short. Seriously. I mean it.

Here is the best recent oil update: Sprott-Oil Painting by Numbers.

And then check this, from George Ure's Urban Survival:

2) Pull up stockcharts.com. Type in $indu:$xoi. Be sure to put the colon in. This shows a ratio of the market divided by oil stocks. It's in a big downtrend!!! This means that the market strength is almost entirely in oil/gas/service stocks. Remember, there are a large number of energy stocks many with big shares outstanding. It also means that the broad market has been in a downtrend for many months. Similar to early 1981.

3)Now look at the weekly chart of $XOI. Also $XNG.The long term uptrends are powerful and even "IF" the peak were be soon it would require 9 to 18 months to put in place a real "distribution top". T Boone Pickens could be right!!!

4)Ten years ago there were about 800 to 900 drilling rigs looking for oil/gas. Now, according to what I read yesterday, there are ONLY about 1250 rigs operating. This does not appear to be enough to replace CONSUMPTION. Conclusion---The natural gas bull market has a lot more time to go.

5)Richard Russell now says that a point and figure chart of gold metal has a price objective of 492. "IF" this were to occur, then the gold stocks could have a run.


Put it all together. Peak oil is survivable on any level you want to talk about. Except one. As a threshhold for a global depression and credit collapse, Peak Oil is a killer, a stone cold killer.

In five years, we'll be using $100 bills for wallpaper.

9 Comments:

At 4:05 AM, June 26, 2005, Blogger Big Gav said...

This will be the first and only time I defend George Bush from criticism.

I think saying he is "goofing off" off in Iraq is unfair. What he (or, more accurately, what his neocons) are doing in Iraq is staging a desperate last attempt to control access to middle eastern oil while we pass the peak. He whose economy collapses last holds the cards in the medium term.

Of course, globalisation has ensured the collapse will hit all eventually (including us outer provincials down here). The euros have done the best job of insulating themselves from the mess to come I think.

[of course, I still think you could make a decent stab of moving away from oil dependency if that was the sole focus of the economy for a decade or two - but its most likely too late for that now]

If I were a Unocal shareholder I'd gladly sell my asian oil reserves (for the right price) to china and put all the money into a nice Oregon off-grid capable eco-villa in some pleasant medium sized town.

Foreign oil reserves may not be any more valuable than US$ if push comes to shove...

 
At 5:12 PM, June 26, 2005, Blogger monkeygrinder said...

You're right of course - I realize there are many strategic points in favor of our colony in Iraq, viewed in strictly imperial terms. I think the neocons did not expect it to be as hard as it turned out. They were all drinking the coolaid.

Just remember, with my writing it is a random balance of nuance and satiric hyperbole.

 
At 12:40 AM, June 27, 2005, Blogger Big Gav said...

Sorry - I'll try not to take you seriously in future :-)

I can't work the neocons out - are they genuinely so deluded ? I always assume they have some machiavellian peak oil related strategy and are just clouding the issue with all their lies and propaganda - so I find the idea that they actually believe what they are saying quite troubling whenever anyone suggests it...

 
At 10:07 AM, June 27, 2005, Blogger Matt said...

I guess that I've always thought that it was a balance with the neocons. Partly delusional idealism and the other stone cold strategy. I'm a way they are a lot like the Soviets. The neocons make grand plans to destroy their enemies and advance their cause, but when the details or way of making it happen become problematic, they resort to faith. This is the only way that I can make sense of the Iraq misadventure. It was good to have control of Iraq and a large military presence in the middle east, but when it came to the details of putting the country back together after the war, the neocons left that to their faith in the free market. Just a theory...

 
At 10:08 AM, June 27, 2005, Blogger Matt said...

monkeygrinder,

You need a picture! Something that nicely matches your screen name.

M

 
At 4:33 PM, June 27, 2005, Blogger monkeygrinder said...

Matt:

We'll see!

http://www.countryclubplaza.com/Tour/tour21.jpg
http://www.floraco.com/organs/monkey/

 
At 5:00 PM, June 27, 2005, Blogger Matt said...

very nice. Here are my three favorites.

90's Clip Art Fun:
http://www.clipartheaven.com/clipart/entertainment/miscellaneous/organ_grinder_-_monkey.gif

Day of the dead:
http://www.floraco.com/organs/history/img4.jpg

Old Timey Monkey Fun
http://www.sideshowstamps.com/images/J116DMonkey.JPG

 
At 8:00 PM, June 29, 2005, Blogger WHT said...

Oil-industry insider Bubba at the Belly of the Beast blog has the best monkey pic.
http://beastsbelly.blogspot.com/

A very obscure reference but the picture reminded me of Frances Lear.
http://www.cnn.com/US/9610/01/newsbriefs/obit.frame.frances.lear.jpg

 
At 9:40 PM, June 30, 2005, Blogger monkeygrinder said...

Oh, I love the bubba monkey.

And though it is a close up, it may literally be a monkey-grinder:

a small monkey holding a cup for change / and or a miniature organ, a comic echo of their galoot chimpy owner's cheap sidewalk warblings.

 

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