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.