The market direction is...

[Sibling Lambicus the Toluous]

2. Premise: The imbalance in oil supply and demand puts pressure on alternative fuels, specifically Bio-fuels.

• Legislations both in Europe and the US are forcing the use of some biofuels in regular gasoline and Diesel
• There is pressure from the public to get carbon neutral fuels.
• There is competition between production of biofuels and food.
• Even if biofuels are net producers of energy (like sugarcane ethanol) we still have the same arable land.
• This pressures are forcing the prices of food up as more 'valuable' crops are chosen by farmers worldwide

Conclusion: The price of food will rise more or less shadowing the price of oil until a balance is reached.

However, also, as prices for biofuels go up, it may also make non-food-based biofuels more viable as well... e.g. (and pulling numbers out of the air) if $100/bbl oil creates a business case for making biofuel from corn kernels, $150/bbl oil may create a business case for making biofuel from the cob, husk and stalk.

Speaking without really looking into things too much, I'd look at energy cogeneration as a growth area.

When I was doing industrial HVAC (about six years ago now), we couldn't sell any of our clients on any sort of cogenerating systems we had available.  While plant managers recognized that waste heat from some process represented an inefficiency and lost energy, they saw a cogen system as just another thing that could break, and not worth the hassle of installing, operating and maintaining it.

Now that energy prices are significantly higher, I think that the tide may be about to turn (if it hasn't already), and small cogen systems for industrial applications are going to hold a lot more appeal.

I don't know which companies are involved in this, but it's just my general impression.

[ivor]

This could be the beginning of the end here.  Inflation is coming.  Wall Street can smell it.  The dollar is weak so our exports could be strong but fuel is so expensive we couldn't afford to send exports anywhere.  Trucking is down in the US.  I'm waiting for the demand for diesel to fall in the US.  When the US drops the ball I expect Asia and Europe to boom driving the price of diesel back up before the US can recover.

[beagle]

When the US drops the ball I expect Asia and Europe to boom driving the price of diesel back up before the US can recover.

I  woudn't bet on the Europe booming part.  Leaving aside  the UK (where the Blair/Brown smoke and mirrors spending and debt show is coming to a rapid U.S. style close), there's a huge disparity in the Eurozone between the northerners(particularly Germany) who want to control inflation and the south where Spain/Italy/Portugal are in real economic trouble.  It's the famous "asymmetric shock" that economists always reckoned would be the real test of the Euro.

[Aggie]

Financials keep sliding... I'm not convinced this is the Big Drop I've been waiting for yet, but it's looking shaky. 

I'm still eyeballing HOU and HOD as there is clearly money to be made there with the volatility of oil, but I don't think I am savvy enough to risk it.

[ivor]

I  woudn't bet on the Europe booming part.  Leaving aside  the UK (where the Blair/Brown smoke and mirrors spending and debt show is coming to a rapid U.S. style close), there's a huge disparity in the Eurozone between the northerners(particularly Germany) who want to control inflation and the south where Spain/Italy/Portugal are in real economic trouble.  It's the famous "asymmetric shock" that economists always reckoned would be the real test of the Euro.

Well okay, but since the US is nine trillion dollars in debt Europe will rebound before the US at the very least.

[Bob in a quantum-state-of-faith]

Well okay, but since the US is nine trillion dollars in debt Europe will rebound before the US at the very least.

MARS will rebound before the US debt is addressed....



.... THANKS BUSH!!!   



That's one legacy our great-great-great-great grandkids will remember him for.... because THEY will still be paying for it.

[ivor]

LOL!  Lets move there!

[beagle]

Well okay, but since the US is nine trillion dollars in debt Europe will rebound before the US at the very least.

Just make sure your Euros are Made in Germany.

Is Handelsblatt an accurate paper generally Swato? Or a Deutsche-Sun?

[Sibling Zono (anon1mat0)]

Just make sure your Euros are Made in Germany.

That just proves that there are idiots everywhere.

If you fear (wish?) the death of the Euro buy gold.

[ivor]

That just proves that there are idiots everywhere.

LOL!  A person can be smart, but people are stupid.

[ivor]

Will the DJIA drop below 11,000 this week?   

[Aggie]

Oh, my....  is it that low?  I've been barely following it this past week. 

Trying to pick an in price on UYG more than anything else these days...  I can't believe it's below 20, but it looks to keep dropping for a while yet. 

[Sibling Zono (anon1mat0)]

Well, things don't look too good, my son has saved about $200 and he wanted to convert his money into something more... solid, in fact the idea of buying gold started to appeal to him, only that the Oz is shy of US$1000 making coins outrageously expensive. Better yet, we were looking into some sellers on eBay and they don't take credit cards or paypal because the margins are supposedly too low. They want personal checks and a 7 day wait! Talk about scary (considering the amounts involved).

[Aggie]

 Solid?  I can offer you Loonies.....   


Agreed on gold; I'd like to have some but the price is too high at the moment, IMHO.  I have an ounce that I should be selling, if anything.



Percentage-wise, I don't think it's any cheaper than gold, but if I was looking for something 'solid' for $200, I'd be considering silver.  Might have more long-term industrial demand, and you can get more than a tiny coin's worth.  Kicking myself for NOT buying silver when it took a brief drop to $14/oz a few months back. 

Up here, one can buy gold, silver and platinum coins direct from the banks with no tax and little-to-no markup over market prices - is that an option down there?  I've looked into buying palladium coins up here which is not so favorable because they are taxed on the original sale, and there's a significant spread over market price on re-sales.  I still like palladium to outperform other PMs at some time in the future because it's industrially interchangeable with platinum and is also a good, underutilized white jewelery metal, so it becomes extra-attractive when gold and platinum get pricey.

[Sibling Zono (anon1mat0)]

Originally he was thinking on euros but silver is indeed an option.