-- Posted Friday, 2 November 2007 | Digg This Article
| Source: GoldSeek.com
Byron King of the Outstanding Investments newsletter reports on some bigshot EWG report that is 234 pages long, and how it "reviews the history of world oil production over the past century and forecasts future output using the most sophisticated statistical techniques available', which are, as we all know (now that Black Swan statistics has shown the inevitable catastrophic failure of the bell curve) not worth squat, but the bell curve is the only thing we have.
Their calculated results are that they forecast, "the onset of severe shortfalls in oil output to meet forecast demand", and already the EWG reports that, "Oil production will fall 7% this year alone." 7%! My God! This is terrible news!
Probably because I had too much beer at lunch, it took me a couple of minutes to focus my mind, but I finally dredged up out of the Mogambo Murky Memory Of Metrics (MMMOM) the old supply/demand dynamic. When I plugged a falling supply of oil and an apparently rising demand for oil into that magical machinery, the answer was that prices will be higher! Much higher!
Naturally, I immediately turned my mind to a question of how many shares of oil companies I have, and I realized I don't have enough, because my sense of greed is causing me to want to go outside and bum cigarettes and loose change from passersby so that I can buy some of the aforementioned shares of oil companies.
And then I heard Mr. King say, "According to the group's research, global oil reserves lie near the 1.2 gigabarrel range - a mere 42-year supply at current consumption levels."
Ow! I actually got a little twinge from my Honking Big Mogambo Greed Gland (HBMGG) contracting in a painful spasm, as this is too, too sweet! Only enough oil to last another 42 years at current rates of consumption? Wow! I can't even imagine how much oil will cost in year 41! Or year 40! Or 39! Whee!
So how deliciously sweet is the profit potential here? I dunno, and I suddenly wish that I had some facility with math, so that I could titillate myself with wild dreams of unbelievable capital gains, enough to make Warren Buffet fume with envy, and then when he calls me and wants me to help him out, then I can turn the tables on him by having my snotty secretary tell him what his snotty secretary said to me when I called him up to ask for a lousy couple of bucks! Like he is going to miss twenty bucks!
But being math-impaired, I completely miss out on that particular part of life, and I am diminished, but let me try and "even the playing field" for a tragic victim of math-impairment, like maybe getting a Handicapped Parking Permit so that I can park right up front, nice and handy, wherever I go, and everybody gets all huffy ("Get out and don't come back!").
Even so, you can look deep, deep into my Bloodshot Mogambo Eyes (BME) to see the utter, utter conviction that I have that consumption levels of oil will NOT be constant during those 42 years, but will attempt to increase because everybody wants it, and the only reason that consumption of oil would not increase in the face of that burgeoning demand is because the price was too high!
Therefore, since I also believe that Peak Oil is a fact of life and that we have now passed the point where we are using more oil than we are finding, this means that demand will grow exponentially while, at the same time, supply falls exponentially. Suddenly, my heart is racing and I am crazy out of my head with visions of the raw, gluttonous greed that this portends!
All of this is, I hope you notice, totally consistent with my original hypothesis that oil prices will be rising higher and higher with every tick of the clock, higher and higher, month after month and year after year, until sometime after you get old and die, and then it won't matter anymore, anyway.
This, of course, makes me think again that I do not own enough shares of companies in the oil business or in the immortality business, and the reason that I don't have more of either is that I don't have the money, and I don't have the money because things cost so much and my boss won't give me a raise because she hates my guts, and she wants to see me quit or come crawling to her, begging, which I won't do because it has never worked in the past, and now the only reason that she doesn't fire me is because she knows I will make her pay, sooner or later, and pay big time, in some kind of sick, Twisted Mogambo Revenge (TMR) and she is too close to retirement for that crap.
I can see by Mr. King's face that he is horrified at this rare glimpse of Vengeful Mogambo Extremism (VME). Quickly getting back to the subject, he quotes Hans-Josef Fell, EWG's founder, as saying, "The world soon will not be able to produce all the oil it needs, as demand is rising while supply is falling." Naturally I shout out, "I already said that! He's copying me, the little plagiarizing bastard!"
Obviously shaken at my stupid, gratuitous, vicious attack, Mr. Fell says, in a burst of understatement, "This is a huge problem for the world economy."
Mr. King summarizes the report as going on, "to predict extreme shortages of fossil fuels will lead to wars and social breakdown."
I say, "We're freaking doomed!"
And when I look at it, we're all saying the same thing. So "we're freaking doomed" is as good as any way of saying it.
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Editor's Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications.
-- Posted Friday, 2 November 2007 | Digg This Article | Source: GoldSeek.com
