Back in 2008 crude oil fundamentals were as much, if not more, of a factor leading to higher oil prices as geopolitical risk. The world was experiencing a global boom phase then. We now know that boom would come to a rather abrupt end.

This time the global economy is far from anything representing boom times, even though demand for commodities is relatively strong. OPEC, admittedly an oil cartel, insists that supply is sufficient to meet global demand and further production is not necessary at this point … and that the world economy can sustain growth with oil prices at $100 per barrel. Whether or not OPEC is lying through their teeth remains to be seen. But can the world economy sustain itself at $110 per barrel? What about $120 or $140?

About 100 years ago, the Russian physiologist Ivan Pavlov noticed that
when the feeding bell was rung, his dogs would salivate before they saw the
actual food. They had been “conditioned.” And so it was with “The Great
Stimulus” of 2008-09.

Gold and silver are sliding sharply just as I predicted, even though the long-term fundamentals remain as bullish, if not more bullish, than ever!

Welcome, ‘Peak Oil’01/29/11 Hong Kong, China – The day of reckoning is approaching and the world does not have a contingency plan.

The truth is that the world’s output of conventional crude oil peaked in 2005 and global oil exports are also past their prime. Furthermore, the unconventional sources (tar sands, heavy sour crude, ethanol, natural gas liquids, bio-fuels and shale) are struggling to keep up with the ongoing depletion in the world’s largest oil fields. Therefore, it is probable that the world’s current production of total liquids is at or near maximum capacity.

Fear and greed drive investor decisions in destructive ways. People want to buy stocks that have been going up for some time because their market performance gives legitimacy to the story. A stock that is falling sharply brings out sellers eager to get out because of their fear that the stock will go lower.