new refineries

[la4angus]

You reckon that may be that Running Horses guy that we had on here 2 or 3 yrs ago touting the Cattle and Feeder Cattle futures.

I wonder how his short positions did for him.

If you're suggesting that I'm some other ahole reincarnated, you're wrong.. I was born this way. :lol:

I never suggested that you were an ass hole. You are doing a good job of that all by yourself.

 

[frenchie]

You reckon that may be that Running Horses guy that we had on here 2 or 3 yrs ago touting the Cattle and Feeder Cattle futures.

I wonder how his short positions did for him.

If you're suggesting that I'm some other ahole reincarnated, you're wrong.. I was born this way. :lol:

I never suggested that you were an ass hole. You are doing a good job of that all by yourself.

:lol2: :lol2: :lol2: :lol2: :lol2: :lol2: :lol2: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap: :clap:

 

[cmjust0]

I hear the boos and hisses, but I don't hear anybody proving me wrong...

I'm not sure if it's because nobody really understands the issue, or if it's that you do understand but "can't handle the TRUTH," so to speak. :lol:

That said, lemme try to put it in terms that are a bit more relevant to the crowd..

Say you're holding 100 steers ready for sale, and all but one meat packing plant suddenly gets shut down...

What just happened to the value of your steers?
What just happened to the value of processed beef?

Clearly, if there aren't enough packers out there to process the number of steers on the market, there is suddenly a surplus of steers, and the price of those steers hits the floor..

Conversely, as there will certainly be a shortage of processed beef, the price of that beef will skyrocket.

Now, if you guys can't see the correlation between steers/crude, packers/refineries, and beef/refined-products, we're all in trouble...

Anyway, now that I've made my crazy, wacko conspiracy theory of basic, proven market forces relate to the cattle/beef markets (with an 'S', as in plural), I'm interested to see who'll have the balls to stick their neck out and try to refute it..

Anybody? Anybody? Bueller?

 

[Caustic Burno]

World oil production and refining production are so tight it sends the commodoties market in a tail spin with the speculators buying and holding any future reserves hedging there bet. This is not near as simply as your answer.

 

[cmjust0]

World oil production and refining production are so tight it sends the commodoties market in a tail spin with the speculators buying and holding any future reserves hedging there bet. This is not near as simply as your answer.

I dunno about a tailspin per se, but hedge funds and speculators certainly send commodity markets every-which-way... I think that's what you were implying.. :?:

Gold was a good example of that yesterday.. Went as high as $720 and as low as $680 within the span of a few hours, and it was all speculation and profit taking. Would have been a good/bad/good/bad/good day for a short position. :lol:

In any case, I hear what you're saying.. All I'm saying is that, in the broadest sense, more refineries would not equate to lower crude oil prices. Less refineries would..

Believe that or disbelieve it... Your money, your call..

 

[skyeagle]

Just went by where the new refinery is being built
in AZ.[sister likes the desert] They have a long way to go
in order to get it up and running.
People might believe in the reasons for the high energies
cost.If the oil guys would stop changing their mines.
We must remember it started with a hurricane.


Go Bush

 

[chrisy]

this is a ski resort in Dubai, United Arab Emirates. ever wonder why you have recently paid over $3 per gallon for regular unleaded gasoline?

 

[aplusmnt]

All I'm saying is that, in the broadest sense, more refineries would not equate to lower crude oil prices. Less refineries would..

Believe that or disbelieve it... Your money, your call..

Why would it matter if fewer refineries would lower the cost of crude oil? Hypothetically what you say might make sense, I guess if there is nowhere for them to send the oil to get refined the price would probably go down. But who cares, because under this hypothetical situation gas prices would go so high no one could afford it.

In the end it is about how high a gallon of gas is. And if you only had a few places making gas and supply of gas was way lower than the demand prices would get stupid no matter how low crude oil was.

There is way more than one simple reason for Gas prices to be going up, it cannot be blamed on one reason or one person (Bush)!!

Things that affect gas prices

· US demand
· World demand (especially china and India)
· Refineries production levels
· Taxes
· Epa Standards being screwed nation wide as well as world wide
· Environmentalist
· Labor Cost (we shut wells down due to high cost to get to it)
· Distribution and Marketing cost

And as far as China being the ruin of the U.S. And causing inflation to rise to 100% China needs us probably more than we need them. Their economy is directly linked to us. If we fail they fail, if they fail we adjust. Who do you think consumes all the cheap goods they produce? And how do you think they get the money to build new plants and up the demand they have for oil? It is from the products the U.S. consumes that they build.

Much like the Cold war China will push issues much like Russia did but in the end they do not want us to fail because if things were double at Wal-Mart then we would not buy them! And china would have lots of new plants sitting empty and they would be back were they were 20-30 years ago with an un happy and revolting society. The new wealth of their citizens is the only thing that lets those in charge remain in charge.

 

[dj]

aplusmnt I guess you get a lot of think time on the back end of a buffer huh. Well put.

 

[aplusmnt]

aplusmnt I guess you get a lot of think time on the back end of a buffer huh. Well put.

Yep lots of time alone to ponder the pros and cons of this world

 

[Caustic Burno]

Sometimes dj it causes his head to spin from all that shakin and fumes from Mr.Clean.

 

[cmjust0]

Why would it matter if fewer refineries would lower the cost of crude oil? Hypothetically what you say might make sense, I guess if there is nowhere for them to send the oil to get refined the price would probably go down. But who cares, because under this hypothetical situation gas prices would go so high no one could afford it.

In the end it is about how high a gallon of gas is. And if you only had a few places making gas and supply of gas was way lower than the demand prices would get stupid no matter how low crude oil was.

There is way more than one simple reason for Gas prices to be going up, it cannot be blamed on one reason or one person (Bush)!!

Everything you say is true, though I sort of disagree that it all comes down to the price of a gallon of gasoline.. In fact, I don't even think it comes down specifically to the fuel content of oil.. Oil has so many uses beyond fuel, and every one of those uses is another pathway to inflation. Best not to ignore them, or we'll end up with pockets full of little tiny dollars before we know what hit us..

Things that affect gas prices

· US demand
· World demand (especially china and India)
· Refineries production levels
· Taxes
· Epa Standards being screwed nation wide as well as world wide
· Environmentalist
· Labor Cost (we shut wells down due to high cost to get to it)
· Distribution and Marketing cost

Speaking of China, India, and crude oil, here's an interesting little thing I read the other day...

In 1900, the average American used 1 bbl/year.. Japan was at 1 bbl/year/person in 1950. In 1965, South Korea was using 1 bbl/year/person.. At those times, each country was just beginning an industrial revolution.. Today, the average American uses 27 bbls/year, and the average Japanese and South Korean each use 17 bbls/year..

Now for the scary part.....

The average Chinese person uses the equivalent of 1.3 bbls/year of crude, and the average Indian uses 0.7 bbls/year -- and they're each at the beginning of the fastest, most high-tech industrial revolutions that the world has ever seen.. Add to that the fact that, between the two, they boast 2.4 BILLION people... If you figure on them getting up to around, say, 15 bbls/year/person (conservatively), you're looking at an *additional* 30+ BILLION bbls/year of consumption... Today's total, global oil usage is estimated at about 30 billion bbls/year..

Not good. :shock:

And as far as China being the ruin of the U.S. And causing inflation to rise to 100% China needs us probably more than we need them.

...for now...

Their economy is directly linked to us. If we fail they fail, if they fail we adjust. Who do you think consumes all the cheap goods they produce? And how do you think they get the money to build new plants and up the demand they have for oil? It is from the products the U.S. consumes that they build.

100% agreed. Then, realizing that they can't keep taking money from our economy and expect us to be able to buy anything, they buy T-Bonds to keep cash in our pockets... In other words, they're allowing us -- as a nation -- to make payments on their crap.. And given that the dollar is shrinking faster than T-Bonds grow, they're actually taking a hit on the loans...

They won't do that indefinitely...

Much like the Cold war China will push issues much like Russia did but in the end they do not want us to fail because if things were double at Wal-Mart then we would not buy them!

Agreed 100%, but again, they're working to move away from such complete dependency on our rampant consumerism...

And china would have lots of new plants sitting empty and they would be back were they were 20-30 years ago with an un happy and revolting society. The new wealth of their citizens is the only thing that lets those in charge remain in charge.

Could be true, but it all depends on when such a scenario might occur.. If we stopped buying their stuff today, we're all screwed -- but they're screwed to a MUCH greater degree.. If we stop buying their stuff in, say, a decade, who knows?? Remember, there are 1.3 billion people in China, and the vast majority of them are dirt poor today.. A rising tide lifts all boats, and China's tide is rising FAST.. Before you know it, they'll have their own little domestic economy rolling along, and they might not need us Americans to buy their crap to keep them going..

When they don't need us anymore, they'll stop buying all those money-losing T-Bonds, and our economy will hemhorrage.. Needless to say, we'll see STIFF tariffs placed on imports and everything will get hellatious expensive.. Inflation rates will be terrible, and interest rates will skyrocket... We'll be lucky if housing prices just stagnate, instead of falling through the floor.. Stocks will go down the crapper.. Commodities will *continue* to soar (foreshadowing?).. Higher consumer prices will spur domestic production within the US... Americans will be forced to stop spending money they don't have on crap they don't need, they'll tighten their belts, and they'll go to work making the stuff the Chinese used to make..

As the standard of living the US falls, the standard of living in India, China, Russia, Brazil, etc. will rise.. Eventually, standards in industrial nations will more or less equalize..

Naturally, we'll be miserable and long for the good old days, but they'll be absolutely ecstatic that they can finally trade their mule for a tractor and be able to afford *a* (singular) motor vehicle for the family..

That's my take on things to come in this "global economy."

[/RANT] :lol:

 

[aplusmnt]

Sometimes dj it causes his head to spin from all that shakin and fumes from Mr.Clean.

You do not know how true this is. We run Propane Buffers, much like having a lawnmower inside a store except propane burns clean. But man when them carbs get out of whack you can get pretty light headed. Once when it happened I almost thought about starting a cow floating service, but fortunately I got some fresh air before the billfold got out of pocket.

 

[Texan]

Americans will be forced to stop spending money they don't have on crap they don't need, they'll tighten their belts, and they'll go to work making the stuff the Chinese used to make..

I hate to see the drop in beef consumption that comes with a belt-tightening, but all of that sounds like just what this country's been needing, cmjust0. When does it start? :lol:

 

[cmjust0]

Personally, Texan, I think it's already starting. The Fed and Treasury are too smart to be transparent about it, so I don't think it's going to happen all at once... Case in point; the dollar index lost more than a full point yesterday and the dollar itself has lost several percent of its value over the last few months, yet the average American hasn't a clue that their paychecks have gotten significantly smaller over the last five years... For the most part, we're just hapless frogs in the pot, and the Fed knows they can boil us all without incident if they just turn the heat up continuously, but very, very slowly.

Many foreign countries -- especially Asian countries -- are beginning to diversify their reserve holdings... They're moving away from the USD and into the Euro.. The 'bric' (Brazil, Russia, India, China) now has more gold in reserve than the G7 countries, meaning that they're trading paper for *real, hard currency*.. Nobody wants to hold US dollars, because they're all suspecting that the US is in the process of filing bankruptcy -- albeit slowly. When you consider that a dollar *bill* is essentially an IOU from the US Treasury, it makes sense that one would want to get rid of them while they could still be traded for stuff. Bill Gates and Warren Buffett -- two of the richest guys in the world -- have been running away from the USD for a few years now..

That makes me think I'm not alone in my conspiracy theory... :lol:

What really worries me is that, occasionally, you'll hear people say the debt doesn't mean anything, and that we could simply erase the debt if we really wanted to... Scary as the prospect may be, they're right.. What these people don't understand, though, is that, to "erase" the debt, it must be inflated away.. In other words, we'd simply print enough crisp, new dollars out of thin air to pay back the trillions we owe.. Naturally, if we printed that much money and put it into circulation, the dollar would be worthless.

But, hey, the debt would be zero! :shock:

 

[aplusmnt]

What really worries me is that, occasionally, you'll hear people say the debt doesn't mean anything, and that we could simply erase the debt if we really wanted to... Scary as the prospect may be, they're right.. What these people don't understand, though, is that, to "erase" the debt, it must be inflated away.. In other words, we'd simply print enough crisp, new dollars out of thin air to pay back the trillions we owe.. Naturally, if we printed that much money and put it into circulation, the dollar would be worthless.

I think you made reference to this a couple post ago also. But from what I always learned the U.S. does not just print money when they fell like it. I always thought no new money goes into the system. I do not believe that when people talk about we can erase the National Debt if needed, it is not by starting the printing presses up, it is by other means of cutting back by the government. A lot of money goes to help a lot of different areas in other countries, such as Aids in Africa etc..... We can make some spending cut backs and lower the debt if we choose to.

Plus most of the debt is to China so maybe a filing of Bankruptcy hurts China more than the U.S. If they are out to get us and manipulating our economy so much as you believe then I have no problems with filing a Chapter 7 on their butts.

I think some of the stuff you say is correct but I also believe you are letting education, common sense and conspiracy theories get scrabbled a little.

I am with Texan maybe some of this flushing of the system is what we need.

In the end, we are a country that can feed and take care of ourselves if needed. People might need to make some adjustments in lifestyles but then again I think lots of us need to do this anyway.

 

[cmjust0]

I think you made reference to this a couple post ago also. But from what I always learned the U.S. does not just print money when they fell like it. I always thought no new money goes into the system.

Plenty of new money has gone into the system.. That's why my "new" 1948 Ford 8N cost me more a few weeks ago than it cost the original owner right off the lot at the dealer. New dollars = inflation.

When the dollar was 'invented' as a currency, it was backed by gold to the tune of 1/20th of an ounce... During the Roosevelt administration, the dollar was revalued to 1/35th of an ounce of gold to put more paper money into circulation as a means to try and end the Great Depression, given that it was a period of immense *deflation*. The paper currency deflated -- got MORE valuable -- because it's volume hadn't increased relative to the number of people wanting to own it. As the population grew, there were more people and the same amount of gold as before, and since the dollar was tied directly to gold, its volume had not been increased to match the number of new people.. Less dollars per person = more value per dollar = deflation.

Theoretically, the dollar stayed at $35/oz to gold all the way through 1971. The US Treasury, however, was borrowing money (selling debt) like there was no tomorrow, in order to pay for Vietnam, etc.. When the foreign governments who were buying the debt got suspicious of our government's ability to maintain the "gold standard," they called the bluff and demanded actual, physical gold in return. The US tried to hold the price at $35US/oz for a while by actually honoring the debts with gold, but needless to say, they didn't have nearly enough gold to honor it all -- and would have gone broke trying. So, instead of revaluing the currency, they simply decoupled the dollar from gold and paid everyone back in paper, fiat money.. Essentially, we defaulted on our loans.

Naturally, the dollar *almost* crashed. The US needed to find a way to force people to continue buying our debt so that we could continue to live at the current standard. In 1973 (I think) the US struck a deal with Saudi Arabia (OPEC) in which we would protect and support them, militarily, if they would *only* trade their oil for US Dollars.. The Saudis agreed, and that deal gave foreign central bankers a reason to trust the dollar again, which gave them the confidence to keep it as their reserve currency. In other words, governments could always trade their dollars for oil -- even though the US government couldn't back them with anything itself. The scheme worked, and the dollar came back from the brink.

Now, for the most part, gold persists.. Oil, however, gets burned. Gold can be stored as wealth and accounted for. Oil is physically used, and therefore cannot truly be accounted for. When you create new dollars to pay for new oil, the dollars persist even when the oil they bought has been burned. Therefore, the "oil standard" has allowed the Fed to order up more and more and more crisp, new currency..

The US had no problem using those thin-air dollars to buy debt, and has done a LOT of it.. More than can be accounted for, in fact -- even for an oil-backed currency. Introduce the Euro, and the fact that Russia, pre-war Iraq, Iran and a few other oil producing countries are considering the prospect of denominating and selling oil for Euros -- to escape trading in the ever growing volume of dollars in circulation -- and the good old greenback looks even shakier. Central bankers around the world are beginning to realize that there are simply too many dollars unaccounted for -- that we've been sloppy, and created more new dollars than we should have -- and they're moving away from the dollar as THE reserve currency.. In short, the world is losing trust in us again.

This time, however, I don't think there are any back room, wink-and-handshake, natural resource deals to be made..

I do not believe that when people talk about we can erase the National Debt if needed, it is not by starting the printing presses up, it is by other means of cutting back by the government. A lot of money goes to help a lot of different areas in other countries, such as Aids in Africa etc..... We can make some spending cut backs and lower the debt if we choose to.

We're far, far beyond the point of being able to simply cut back spending and knock down the debt.. I read the other day that we'd need something on the order of $60 TRILLION on hand right now to pay for the obligations we've already made. That's about $200,000 for every man, woman, and child in the US, *and* assumes that the government spends $0 until it's paid off.. Not happening..

The fact that the dollar is dropping so hard means that central bankers around the world are looking at those numbers and saying "not happening" too.. They know we'll have to take care of it -- eventually -- and that we'll almost certainly have to inflate it away.. That's why they're looking at the Euro, gold, other paper currencies, etc..

Plus most of the debt is to China so maybe a filing of Bankruptcy hurts China more than the U.S. If they are out to get us and manipulating our economy so much as you believe then I have no problems with filing a Chapter 7 on their butts.

Much of the debt is to China, but I certainly don't think they're out to get us, nor do I believe they're intentionally manipulating our economy just to be mean. I didn't mean to imply that they were, and if I gave you that impression, I apologize. Put simply, I believe that China is building an empire. If they crush the US in the process, it's probably not because they planned it that way or because they wanted to see us crushed -- it's because we set ourselves up to BE crushed. If they take advantage of our stupidity and end up dominating us, we've got nobody to blame but ourselves.

As far as inflating away our debt to China, I kind of agree with you -- I wouldn't care either.. In fact, if a person set themselves up just right, hyperinflation could be the best thing that ever happened.. When you imagine what an ounce of gold would bring if bread was $100 a loaf, gold looks like a bargain at it's current price of $640/oz.. If it were $64,000 an ounce, I could pay off every debt I have with less than $2000 of today's dollars.. Not a bad trade..

think some of the stuff you say is correct but I also believe you are letting education, common sense and conspiracy theories get scrabbled a little.

You may be right, but you can only really *know* something that's already happened.. You have to guess at what's *going* to happen, and the best way to do that is to look at what's already happened..

Clearly, I've done more than my share of that. :lol:

Sometimes I tell myself that the dollar couldn't possibly inflate its way up to a $100 loaf of bread, but when I look at exchange rates around the world and see SOOOO many remnants of hyperinflation, I ask myself why I'm so sure it *couldn't* happen here.. Time and again, I can't find a single reason why not..

I am with Texan maybe some of this flushing of the system is what we need.

I agree, and judging by the slide of the dollar, the world agrees.. When the world markets agree on financial matters, it usually ends up being only a matter of time before the principle agreed upon is brought into fruition..

In the end, we are a country that can feed and take care of ourselves if needed. People might need to make some adjustments in lifestyles but then again I think lots of us need to do this anyway.

We can feed ourselves, but we don't.. As incredible (or, incredulous) as it sounds, the US is a net importer of food.

Just gets more worrisome by the minute, huh? :lol:

Anyway, lifestyle changes are coming whether we need it or not.. I'm with you, though, in that most Americans DO. As for me, personally, I've got two beat up, paid-for vehicles, two beat up, paid-for tractors, a bunch of paid for equipment, zero credit card debt, and a 2br house on some good acreage.

I say let the hammer fall. I'm as ready as I'll ever be.

(..sorry for being so long winded..)

 

[chrisy]

cmjust0 you talk like you are on the money markets, I have read this with my brother who is a dealer, and he was agreeing on the most part with what you are saying but it is a bit more complicated than that, you have put your point over very well for a lay person to understand. well done.

 

[cmjust0]

cmjust0 you talk like you are on the money markets, I have read this with my brother who is a dealer, and he was agreeing on the most part with what you are saying but it is a bit more complicated than that, you have put your point over very well for a lay person to understand. well done.

I'm not a financial guy.. I develop software on weekdays, and dig postholes and brush-hog on evenings and weekends. :lol: I take a lot of interest in economics, though, because I think everybody should know what they're taking in trade for work and "stuff" they sell...

I'm sure your brother is right, in that everything is more complicated than the way I put it.. My own understanding of it goes a bit further than what I've written here (I think, anyway! :lol: ), but I don't understand it all as well as I'd like to. I try to learn a little something new about economics every day, though!