USD/Oil Divergence

[Taco]

Here's proof that oil prices were deliberately crashed recently to artificially prop up the dollar. While the dollar is in a temporary rally, don’t be fooled. I'm guessing what happens the next time the dollar and oil cross like this is not going to be pretty.

[Rock]

Here's proof that oil prices were deliberately crashed recently to artificially prop up the dollar. While the dollar is in a temporary rally, don’t be fooled. I'm guessing what happens the next time the dollar and oil cross like this is not going to be pretty.

This is actually quite bullish for US economy, not only due to much cheaper oil but also as an indication that we are getting near to no longer being a net importer of oil.

Now that Brent has just fallen just below 60, it might be an interesting medium term punt to pick up some futures. Yes, buying a commodity displaying a chart like the current one may look like catching a falling knife. But at these levels, Saudi and OPEC are probably going to scramble. They might hit panic button with Saudi in lead.

[newlifeinphilippines]

actually cheap oil is destroying the one thing we had going for us, our oil resources.

[Rock]

actually cheap oil is destroying the one thing we had going for us, our oil resources.

Actually, we're still a net importer but not by much anymore. Cheap oil benefits us in many ways and will be a big force to stave off inflation.

[newlifeinphilippines]

actually cheap oil is destroying the one thing we had going for us, our oil resources.

Actually, we're still a net importer but not by much anymore. Cheap oil benefits us in many ways and will be a big force to stave off inflation.

the only industry we have is oil? Now that its popping so is the phony us economy soon as a result of that alone let alone all the other reasons it will (fed will try to delay it if they need to though).

So what if we have cheap gas prices. the american economy doesn't produce anything of value anymore except oil and now thats gone.

[fschmidt]

Oil prices weren't deliberately crashed. But this isn't good for the US economy either. What we have here is how the modern world really works. Oil is cheap because of increased production from fracking. But this fracking is being done at a loss. Why? Because the fracking companies scam investors into investing in money losing business. Part of that money goes into fracking, like a pyramid scheme. And part gets stolen (executive compensation) by the guys who run the fracking company. In the end, the fracking bubble will burst and investors will lose their money and oil prices will rise. Most of these investors are dumb money like pension funds. So basically oil is being subsidized by American savings. This will end badly, pretty much like the last bubble (real estate) ended.

[Rock]

Oil prices weren't deliberately crashed. But this isn't good for the US economy either. What we have here is how the modern world really works. Oil is cheap because of increased production from fracking. But this fracking is being done at a loss. Why? Because the fracking companies scam investors into investing in money losing business. Part of that money goes into fracking, like a pyramid scheme. And part gets stolen (executive compensation) by the guys who run the fracking company. In the end, the fracking bubble will burst and investors will lose their money and oil prices will rise. Most of these investors are dumb money like pension funds. So basically oil is being subsidized by American savings. This will end badly, pretty much like the last bubble (real estate) ended.

What do you think break-even oil prices are for fracking factoring in the money siphoned off by scamming execs?

[OutWest]

Oil prices weren't deliberately crashed. But this isn't good for the US economy either. What we have here is how the modern world really works. Oil is cheap because of increased production from fracking. But this fracking is being done at a loss. Why? Because the fracking companies scam investors into investing in money losing business. Part of that money goes into fracking, like a pyramid scheme. And part gets stolen (executive compensation) by the guys who run the fracking company. In the end, the fracking bubble will burst and investors will lose their money and oil prices will rise. Most of these investors are dumb money like pension funds. So basically oil is being subsidized by American savings. This will end badly, pretty much like the last bubble (real estate) ended.

What is your source/evidence for this...that the cracking industry is just a big scam?

[fschmidt]

What is your source/evidence for this...that the cracking industry is just a big scam?

I will admit that it is secondary sources since I am not personally betting on this. Keiser Report talks about this as well as other sources. It makes sense to me in that fits the general pattern of modern business being a scam (not a conspiracy). I don't know what the break-even price, but other sites discuss that. Anyway, I have no reason to bother verifying this stuff but you can take it as another possible explanation.

[Taco]

But this fracking is being done at a loss. Why? Because the fracking companies scam investors into investing in money losing business.

I disagree. Fracking is being done to poison the ground water supply and drive farmers out of business.

Farmers Fear Fracking
http://www.telegraph.co.uk/news/earth/e ... -ruin.html