From the Wilderness' Peak Oil Blog

Tuesday, January 20, 2009

A DAY OF DAYS

Well, it is accomplished... It will take me weeks to realize that Bush/Cheney are really gone. And I have to keep reminding myself that I did see Barack Obama bitch slap ol "w" over what he did to the Constitution. And I'm chuckling that an instantaneous order was issued to freeze and/or reverse all Bush presidential directives over the last month re: the environment and other issues. Rahm Emmanuel was right on top of that and I'd bet it was executed (excuse me Rahm) with German military precision. That's a good sign. I don't think that Mr. Obama wasted a micro-second in letting everyone know that he's his own man. What man that is remains to be seen but these two small signs are good ones.

Look guys, things are falling apart so fast I can't keep up. Forget that the Dow lost 300+ today. B of A is going down. Citigroup is going down... again. (Go back and see, I called this one too.) Global mining (of almost anything) has come to a virtual standstill. The business bankruptcies won't really begin for a week or two and they'll tsunami by March, April and May. Europe has declared itself in a Depression... I did note one interesting sign today. For the last four months or so, completely out of synch, as the Dow fell, so went gold. Not only counterintuitive but to me a sign that the panic was intense and that whoever is controlling the gold price suppression was thinking, "We can't let gold rise even three per cent aginst the markets. The panic is so intense that if people see even that spread it'll start a stampede." But today the Dow tanked and gold soared. Sign of a breakout?... Could be.

Every day Rice Farmer and others send me links to stories from around the world... in addition to the ones I find. There's good news and bad news. The bad news is that the list grows longer and scarier each day. I must take two long breaks and play with my dawg for twenty minutes to get through the lists. The good news is that more and more media outlets -- some of them very reputable -- are starting to tell it like it is.

I got a wonderful compliment today. Stan Goff would really appreciate this. I was talking to an Army returnee today. He was a medic with the 10th Mountain Division in the Iron Triangle. He told me that "Crossing the Rubicon" is on the Division's recommended reading list.

Hoo Ah!

-- MCR
*************************************************************************************

JO adds:

Asian cellist, Jewish white guy on violin, disabled, to boot! Venezuelan woman on piano; African-American on clarinet. The signal came through loud and clear: This is going to be a truly ecumenical administration, dedicated to the proposition that all men are created equal, even women. Which is to say, we're all going down together.

Pity Obama. He will be viewed as the knight, ("Obamalot") who rode in with such promise, yet whose advent in fact ushered in disaster such as the world has never known.

Does he know he's been set up? Have they minced words in telling him what's in store? He seems awfully serious these days. And his speech started off on a grim note of warning.

But soon enough we were back on the familiar track of hope triumphant.

Perhaps eventually, depending on one's definition of 'triumph.' But to quote T.S. Eliot, "Between the conception and the realization falls the shadow." Between now and then is going to be an awful lot of TSHF.

For starters:

India Sends Message to Pakistan With New Missile Tests
Hu's Proposals for Taiwan Discussed with US, Russia, Norway
Doomers Go Mainstream
New Yorker article on Dmitri Orlov and Jim Kunstler, also touching on goldbugs and with a nice plug for Carolyn Baker's new book.
Saudi Intelligence Chief Meets Zardari, Gilani
Brazil Least Affected By Global Economic Crisis
Another Inauguration Not To Be Missed

27 comments:

Unknown said...: did europe as in the EU officially declare themselves in a depression???

really???; 9:21 PM
pstajk said...: Shape without form, shade without colour,
Paralysed force, gesture without motion; 9:35 PM
Sebastian Ernst Ronin said...: Jo, re "dedicated to the proposition that all men are created equal, even women. Which is to say, we're all going down together." Ouch! Nice shot. I also like "Obamalot." Did you grab a copy right on that and protect the url? =:-D

Did anyone catch that "new era" and "new age", in combination, were used a total of four times. I guess NWO is becoming a bit of a media heat magnet, what with Hank Kissinger spouting on the floor of the NYSE. New age is not quite as crass, plus it taps into a dangerously apolitical public psyche/demographic.; 10:00 PM
Jenna Orkin said...: sebastian

alas, i didn't coin 'obamalot.' it was in a list of obamamania including obamamentum, obamabot, obamacize, obamarama, and obamaNation.; 10:20 PM
Unknown said...: Mike you are amazing. Thank you for all that you have done and continue to do. When you say that things are happening so fast that even you can't keep up with it all, people better realize that this is for real. I believe the majority of the readers of this blog understand that.

anyway,

its very interesting that Europe and/or EU has declared they are in a depression. Here is a link to give a little info on the status of the US:

http://meltdown2011.wordpress.com/2009/01/17/stats-say-yes-its-a-depression/

anybody notice how Obama didn't actually pledge that HE would uphold the Constitution today ? go back and watch it again if you can. I guess it doesn't matter much. The thing hasn't really been relevant for nearly 8 years.

also, did anybody notice the directional sign to the "crypt" at the top of the steps? i wonder if there was a human sacrifice before the festivities. haha.

seriously... thank you to everyone for their contributions and ideas. you are all great teachers. I'm 27 years old and i think i've learned more in the last year and a half following MCR than i have in my entire academic career.; 10:40 PM
Jeff King said...: Speaking of recommendations, if the group is looking for a good movie I’d highly recommend checking out The Times of Harvey Milk. The entire documentary is free online at hulu. There are commercials, but hey, it’s the internet. You get what you paid for.

Gus Van Sant basically just reenacted this documentary. There’s about 10-15 scenes that he recreates or fleshes out and there’s another 10-15 scenes where he uses the EXACT same news footage as the documentary, and all in the same order. And I’m not knocking that. Talk about being True to your source material.

It’s a pretty amazing documentary about a very surreal story.

What’s amazing to me is how many people from this 24 year old documentary still dominate the local political landscape. Tom Ammiano is now in the California State Senate. Terence Hallinan was our district attorney for a while there. And Diane Feinstein is still a cunt. My personal favorite though is Dennis Richmond. He’s been like the black Clark Kent of Bay Area TV news reporting for the past 30+ years. You know that guy goes out and fights crime once he gets off from work. That’s why he finally retired from news casting - to focus on kicking ass fulltime.

Lots of great file footage of San Francisco is all of its goofy 1970s Boogie Nights glory. Dan White with his bowl haircut (Check it out! Same style as the busted Governor of Illinois. Creepy…) and Century 21 jacket. Check out the news guy that interviews Dan White on the streets. Yep. John Holmes had a job at 7 On Your Side for a while there. Not that many people know that.

It’s pretty amazing what Harvey Milk was able to accomplish without any cell phones, twitter, myspace, or blogs. I’ve been thinking a lot about that and drawing inspiration where I can. Dude was a bad ass. He would go debate his opponents in enemy territory, red zip codes, Orange County. I think that’s a big reason why Prop 6 failed and why Prop 8 passed. We don’t have any Harvey Milks on our team anymore.; 11:54 PM
v said...: some articles I found:

"Forget peak oil, West's demand growth peaking"

STERLING IN FREE FALL

Gordon Brown brings Britain to the edge of bankruptcy

V(incent); 11:56 PM
San said...: I understand tough times are ahead, but I like the messages of hope even with the grim future ahead. Humans are strong beings. With the hope Obama shows, I feel like people will find the energy to over come it. You guys spreading the help is already good. Hope will help the uninformed.; 12:17 AM
RanD said...: To FTW readers: any of you that might have missed businessman's comments post (the 20th/last one) on FTW's Jan 19, 2009 post titled KSM CONFESSES! -- WHY NOT? should go back and read how b-man found that really bad things (in this instance the absolutely horrible Pres G. W. Bush administration) can provide crucial stimulus for minds needing to better understand the workings of our world. Businessman's words reflect a universal principle here, one that's fundamental to the process whereby the human brain is progressively brought into consciousness (and eventually cosmic consciousness) of reality: "In order to find what's good, ya gotta know what's bad."; 5:48 AM
taihenda said...: Thanks to all for very insightful comments.

I work in the steel industry and thought I would chime in on the state of this harbinger sector.

From an article published in an industry rag based on an interview with Michael Rippey, president and chief executive officer of ArcelorMittal USA.
"The steel industry is poised for a nasty 2009 ...

Rippey pointed out that the United States likely is going through its deepest recession since at least 1957, and the worst that most industry executives can remember since 1973 or 1982. "This is a big one," he said. "By any measure, it's very deep recession."

[Good, he appears to be living in the real world...]

As demand "has continued to evaporate," U.S. steel industry capacity utilization has hit historically low levels, Rippey said. In the Great Depression, capacity utilization dipped to as low as 20 percent; in 1982, it slipped to only 50 percent; this month, it's below 40 percent.
[Currently 2/3 of steel making capacity in the US is idle. I have never seen demand this poor in my 18 years in the industry.]
...

The difficult times are reflected in data such as the architectural building index, a leading indicator whose drop suggests a very tough first half of the year, he said. "If the architectural guys aren't busy designing things, we're not going to be busy building things for a while."
...
On the service center side of steel, inventories have fallen significantly in the past few months, which is encouraging, but shipments are falling correspondingly, Rippey said.
[I expect to see dozens of these distributors file for bankruptcy in the coming weeks and months. Many are loaded with expensive inventory they contracted in the fall of '08 for which they don't have a home. The credit crunch will finish them off because the can't unload their inventory at any price to free up cash.]
...
North American vehicle production likely will fall to 10.4 million units in 2009, down from 12.6 million in 2008 and roughly 15 million in 2006, Rippey said.
[I sell steel to the auto guys and I'm very worried about the supplier community. Basically, we've stopped prospecting for new business because we can't get credit approval for an new customers in the auto industry.]
...

But there may be a very positive
It is long-term trends, especially in demographics, that give Rippey hope, thanks largely to the anticipated buying habits of the "Echo Boomers." They're now only in their mid-teens, but like the original Baby Boomers they'll want new cars, houses and all the other amenities and appliances that go with American middle-class life, Rippey said. And there are 80 million of them.

[Alas, as he must be in his position, Mr. Rippey is deluded about the future.]

"This is enormous, absolutely enormous," he said. "We sit here today, scrapping more cars than we're building. And out ahead, demand for cars is going to grow in an exponential way because of the Echo Boomers. . . . And nothing is going to stop them—they are going to demand an automobile, they are going to demand a home."

[Sorry, Mr Rippey, you are so far off the mark there it is not funny.]

...
As people in developing countries seek to reach American standards of living it means a "tremendous long-term positive for steel consumption in the world."

[And tremendous long-term damage to the climate and the environment!]; 6:35 AM
Unknown said...: SUPER-here' a link on EU situation

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4278642/Monetary-union-has-left-half-of-Europe-trapped-in-depression.html

Jenna & Mike thanks for your work;); 6:47 AM
Peter J. Nickitas said...: Michel Chossudovsky on the stock market response to the inaugural address, subtitled "Where Have All the Creditors Gone?"

www.globalresearch.ca/index.php?context=va&aid=11919

Peter J. of Minneapolis; 7:13 AM
RanD said...: For FTW readers that might also have missed my Jan 20 comment post, the following is a significantly improved resend --

Again, from the watchtower where I've been standing for over 30+ yrs now, I continue seeing the situation humankind is heading into NOT being (and ultimately never really having been) so much one of how to 'physically survive' as it has always been of simply 'getting our minds as fully developed and accordingly collectively synchronized' as possible BEFORE whatever it is that invariably always comes down the pike to return our bodies to nothing more alive than any other ever-continuously recycling accumulation of intrinsically inert physical molecules.

Also again, we human beings are very special organisms. Unlike any other species of Earth-dwelling animals, we've been created/evolved/developed to FULLY understand and thereby OPTIMALLY interact with everything that can and does affect our lives when experiencing the condition(s) which is(are) unique to our being physically embodied. As living organisms we are best described as being intelligent/sentient spirits living within systemically evolved/developed physiological constructs which our singularly intelligent/sentient spirit selves implement to our purposes whenever and wherever we choose to do so -- throughout the the entire contextual paradigm of our current Universe. And our only obstacles to optimally experiencing the immeasurable rewards which this Universe continuously offers us is our collective ignorance, prejudices, and bigotries.

As for "spiritual masturbation", such a thing is every bit as delightful as physical masturbation. The Universe I live in provides harmless pleasures in infinite abundance to anyone and everyone with the smarts to be here and fully partake of them. And as for hell, that is for those who, via their own self-imposed mental entrapments, insist on remaining there.

*******

I sensed from my very first viewing of "Truth and Lies of 9/11" (about 6½ or so yrs ago now) that the remarkable MCR/copvcia fellow (who'd produced the video that had just introduced me to him) and I had the potential of one day joining up, in one manner or another, to expedite our common objective; which objective, if I might state it for the both of us, is to make the world a better place for everyone and every other living thing that we possibly can.

As it ever is re interactions of two or more equally sincere, equally well-focused, ambitiously self-informing strong minded spirits with conceptually identical but perhaps objectively somewhat varying targets -- any potentially shared tool such persons as ourselves might consider forging, as a team, can only be built via the cooperative and collaborative interplay of all involved parties' egos, senses of empathy, energies, independent decision-making processes, and words thereof the whole of it. And I'm confident that all of us here at FTW are at least rhetorically in agreement with these points. However, in addition to this so far being the case:

All good craftsmen/women who come into this truly hallowed place must enter ultimately naked and equal, knowing that each one of us is always and every time actually a novice at this sort of thing, having nothing more valuable to offer each other than our personal equally human selves. Undoubtedly, each of us at least feels intuitively that we have or must have something important and valuable --something at least simple and plain if not enormously complex and magnificent -- to place upon this hallowed place's tool-maker's table, where all of us can see what each of us brings here and thereof be considered for what it/they and we are. Consequently, in this genuinely special place I look to see the simplest of us all being the greatest and the greatest the most humble, and therefore expect to find all of us here ideally equally so-disposed.

Here we are given to see and know that what we all most truly want and need to place on the smithy's table must be something we are able to equally understand, share, use, and equally benefit ourselves therefrom. And thus, as such, what we each bring into the room with us is ultimately and necessarily the exact same thing. But -- each of us also brings into the room within our personal selves one truly Universal Potential Adversary, which adversary is able to subvert any hypothetically collective/singular objective we might otherwise equally understand, share, use, and thereby benefit ourselves therefrom. And that adversary is ANY EGO which would attempt (whether consciously or unwittingly) to supplant true democratic team work with ANY form of ostensibly shared human undertaking which has in its foundation ANY degree of essentially only personally self-serving parochial objective. Be assured, such human ventures as those which are infected with any exclusively only personal motive(s) will never progress humankind beyond where humankind has right up till now always been.

And so it is from consideration of these things that RanD has come here to place on this tool maker smithy's table exclusively the Universal Common Good. Nothing simpler, nothing greater, nothing less nor other than that. In other words: we are here just be good to and for one another.

*******

From studying and weighing all media presentations -- from the glorious chirpings of woodland societies of spring peepers to our uniquely human blogosphere chatterings and all the rest of our Universe's consummate transmissions, each iota of which such transmissions comes variously yet directly into the human estate, I realize that what I place upon the table to help provide entrance into humankind's future comes from a consciousness paradigm not yet commonly and well studied, thus not fully understood, nor thus capable of being accepted by all. As it nonetheless is, one day soon all of this which is being spoken of here will be commonly known, but only after a prerequisite number of our species' members have finally chosen to transcend the ignorance and mindless violence laden worlds we've been creating right up till now virtually since day one of our species' advent on this utterly wonderful planet Earth.

Moreover, therefore: every, any, and all unquestionably awful things that are taking place throughout the human condition these days, and all the truly awful things that are in front of us yet to be seen and experienced -- all of which include consequences produced of strictly human behaviors as well as entirely non-human origins -- are but harbingers of our Universe's progressively nearing grandest stage of being since the moment It physically brought Itself into existence those several billions of yrs ago.

*******

And so it is, having stated all this most essential information we've been given to disseminate -- on exclusively this MCR/JO/copvcia/FTW blogspot -- RanD is now thanking all of you for the fact of your having personally contributed yourselves, through your own personal words, to the making of these words that you have just finished reading here.

Much love and all possible good fortune to us all, forever; sincerely,

RanD; 7:25 AM
sambahdi said...: From the UK Times.

Riots in Iceland, Latvia and Bulgaria are a sign of things to come.

http://www.timesonline.co.uk/tol/comment/article5559773.ece

I can say there are definitely fears being reported in the papers here. This article really spells it out. We're damed if we do and damed if we don't.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4299883/UK-cannot-take-Icelands-soft-option.html

As to what's happening on the street. Nothing. There were big protests over Israel's incursion into Gaza.

I think everyone's thinking everything will be OK now that Obama has taken office.

BTW found this site to be an informative presentation about how a debt run economy works and it talks a lot about peak oil.

http://www.chrismartenson.com/crashcourse; 8:08 AM
Unknown said...: RE: Gangs of America (Jan. 19th Jenna link - looks worthwhile!)

I haven’t read the book, but I’d like to comment on a common conflation of two terms: feudalism and gang warfare. The latter marks a small step up from Hobbes’ nightmare of “each against each”, in which groups form for safety, and to mutually oppress everyone else. European feudalism crystallized in the eleventh century IN RESPONSE TO the horrors of gang warfare, which had throttled Western Europe for a couple of centuries (following catastrophic invasions by Vikings, Magyars and Arabs).

A society characterized by gang warfare enjoys no predictable rules. Almost all human energy and useable natural resources are forced into the service of violent competition for survival. Life expectancy is quite low, education cannot flourish, and the diet is abysmal. Lives are shattered unpredictably and often, and so people forgo the subtle joys of high culture.

Feudalism involved a rule of law, sponsored by the Church (at a good price) and enforced by increasingly potent power blocs (such as the thing which became France). Each character in the feudal drama was said to have certain rights and duties. Roads stayed open. Education and commerce began to flourish. It wasn’t democracy, but feudalism was a vast improvement over the bloody tenth century, which had been out-and-out gang warfare.

I’ve been hearing a lot about “corporate feudalism”. What people seem to be talking about is a loss of democracy. Aristotle noted that societies move between democracy, oligarchy and monarchy for various reasons. What we are seeing with the corporate menace is definitely a shift toward oligarchy. Democracy’s rule of law, frayed and torn, constrains but slightly what corporations can get away with. Feudalism would have guaranteed workers their jobs, homes and incomes, but we’re nowhere near that.

Should the modern global oligarchy prevail, we are not likely to become vassals – or even serfs – but slaves on a dying Earth. As the ecosystem gives out, no oligarchy could sustain an orderly society, no matter how much force it used. We would slip into a punch-drunk chaos much like Europe after the Carolingian Empire. But we cannot afford to muck about in gangland chaos for a couple of centuries. Post-industrial problems such as toxic waste and nuclear materials can only be solved by broad cooperation between civilized people. The oligarchy cannot accomplish these huge tasks from behind the high walls of their citadel.

What we’re facing is not feudalism (we should be so lucky!) but the brink of chaos from which humankind could never return. The oligarchy seems to care only about itself, and is running our planet to destruction. Let’s not moan about the stone age or feudalism, neither of which is our fate. It’s time RIGHT NOW to create BRAND NEW SOCIAL MECHANISMS that can preserve and extend what is beautiful about our race, and restrain what has been so very, very destructive.; 8:25 AM
Anonymous said...: I have no pity for Obama. At his level if his eyes aren't opened it's by choice, not circumstance. Every US President for the last 40 years has been a traitor. Expecting differently based upon color of skin is a fools errand.

The Bush Administration is gone but not forgotten. Read "The Choice" by Brzezinski. What we have now is lipstick on the pig. Except that the pig has grown much larger.

I have a story that unfolded recently that paints our picture perfectly. My inlaws, who have no animal experience, were approached by some friends to help move a pig so that she would eat. The bovine had been so overfed that she could no longer support her own weight. Without immediate action she would die. The pig had been purchased by well-meaning parents for a bright-eyed daughter who was looking for a unique pet. Nobody informed them that when choosing a pig as a pet, you need to select a breed that will adapt to a household. When the pig outgrew them, they gave the pig to an animal rescue organization.

Now enter my inlaws. The family had gone to visit the pig and discovered that the woman who ran the shelter had decided to show the pig at fairs because of it's size. She had been trying to grow the poor cresature as large as possible. When my inlaws showed up, the girl who owned the pig was crying, the woman who ran the "shelter" was furious, and the pig was on it's belly, wedged in the doorway of a stall, and was violently angry.

Here's what happened: My father-in-law was ordered by the woman to get behind the pig and start shoving. When he did the pig began squealing and thrashing. The girl started bawling and my mother-in-law tossed her cane and ran for the first time in a decade. The pig didn't budge and the woman began cussing up a storm as she berated my father-in-law, who was in fear of his life. The pig was massive.

And that is where we are today as a country. Our government has been transformed into a pig that was handed to us by folks who knew it would become unmanageable. We've been led on escapades to help the pig, but it get's handed off to others who promise to help, but whose real intention is to grow the pig even larger. We call this process "elections". And when those who were duped look for people to help, those who stick their necks out find themselves facing a behemoth that can no longer be moved, with caretakers who'll do nothing but bemoan and belittle (and kill) those who are trying to provide real help. And the folks who recognize the true threat do everything in their power to get as far away as possible.

When I first heard the story, the mental image had me laughing hysterically. But my father-in-law remained stone faced. His response was "You wouldn't be laughing if you had been there".

That's where we are, folks. We're all facing the pig. Obama is lipstick.

Also, I've probably stated this before on this blog, but I've enjoyed my share of Sunday morning champagne brunches at Fort Belvoir. And I've attended my share of informal gatherings with flag level folks from various branches and nations. Our top brass aren't idiots and most of 'em have strong moral character. I could tell you some doozies about those who don't, but most of them do. If the SHTF again inside the US, don't expect those who were caught off gaurd last time to fall into order the next time. Some very important eyes are wide open. Things may happen within miitary circles that don't get reported by the media. That's speculation on my part, but it's not blind speculation.; 8:34 AM
Anonymous said...: Hey, all

A little off-topic here, but I'm setting up some Google alerts for news items to watch for, and would love some suggestions. Right now I'm watching things like "Maurice Strong" (because he's an absentee bigshot in my community), "peak oil", "civil unrest", "soil depletion" and "bank robbery".

What are y'all keeping an eye on, news-wise?; 9:12 AM
businessman said...: Here's the translation of a statement made by Hugo Chavez during a recent political rally on a historic Venezuelan battlefield:

"If Obama as president of the United States does not obey the orders of the empire, they will kill him, like they killed Kennedy, like they killed Martin Luther King, or Lincoln, who freed the blacks and paid with his life."; 9:54 AM
Jenna Orkin said...: athene:

various combinations of countries. ie 'russia' 'india'; 9:59 AM
Unknown said...: MCR, your comment about Rahm Emanuel is a bit unsettling. You rail against the Elite but have no problem with the fact that RE was an investment banker at Wasserstein Perella and on the board of Freddie Mac. Please elaborate, thx.; 10:58 AM
F.Kamilov said...: British economy facing 'worst downturn in 60 years' - Darling

http://www.forbes.com/afxnewslimited/feeds/afx/2008/08/31/afx5374382.html

Oil, Obama and Pakistan

http://www.thenews.com.pk/print1.asp?id=158165; 11:27 AM
Ancient_World said...: Hi Mike,
I am first time poster here and just wanted to thank you for Rubicon and End of Suburbia which definitely got my attention many years ago.

Related to your comment "Global mining (of almost anything) has come to a virtual standstill,"

In the NGM article link below, Larmer states that "Gold mining, however, generates more waste per ounce than any other metal." I understand gold is recognized universally, but the current method of production seems very destructive to the environment.

http://ngm.nationalgeographic.com/2009/01/gold/larmer-text

"In 2007 demand outstripped mine production by 59 percent."

"In all of history, only 161,000 tons of gold have been mined, barely enough to fill two Olympic-size swimming pools. More than half of that has been extracted in the past 50 years. Now the world's richest deposits are fast being depleted, and new discoveries are rare." (sounds like peak everything as Richard Heinberg has said); 12:48 PM
Unknown said...: Michael,

How wonderful it is to see you posting here on a more regular basis and with a passion that shows your health and strength has recovered quite a bit.

I have some feedback for you on market movements.

The dynamic of forced selling has been very visible in the commodities markets in the last week - especially with oil, and West Texas Intermediate crude futures on the NYMEX. This pattern has manifested in the last three months at the point where the near-term contract expires and rolls over to the next month in terms of the "active" (most widely traded) contract. What appears to have been going on are many players like hedge funds stalling until the end of each of these contracts to liquidate to cover their other obligations. The sellers could be institutional trading desks too. What is clear is that the trading pattern is right out in the open, and has repeated three months in a row. One of the keys to see it in operation is the expanding spread between Brent and WTI, and the spread gets bigger as the days to contract rollover tick down. This is an artifact of forced selling of NYMEX contracts.

At the end of the day on Monday, WTI turned around. Tuesday saw the new contract come into play, and as I write on Wed., we're seeing oil catch a very strong bid, now that the forced selling squall has passed for the time being (it will likely appear again at the end of the current month contract too… maybe in 25 days). This forced selling issue has been noticed by Matt Simmons as well and if you look over his slide shows on his website, I think he has talked about it. I know he mentioned it on the Financial Sense Newshour w/ Jim Puplava - not positive about the slide shows.

Normally, oil and gold (the latter, as you noted) would be heading down with generalized asset liquidation moves. But trading this week does indeed suggest there's some separation going on: 1) the forced selling stopped before the contract rolled over - a key signal, visible at the end of the day Monday; 2) oil and gold performed well in Tuesday's trading, and gold has been reasonable Wed. even with what appears to be some management efforts to keep it from crossing the $865 break-out point of confirmation for technical analysis momentum traders (the gold cartel love messing with the minds of TA traders).

The general markets have been selling off pretty much through 2009 thus far, with the coronation of Obama marking the near-term point of selling on the news. How so? Powering the December bounce was the traders and investors jumping into the markets on the faith that Obama super-charged bailout money would push asset prices up. At the margin, these liquidity flows do indeed operate and we are not necessarily doomed for a deflationary spiral in 2009. I read yesterday and today as the market reversal and for at least the next two weeks, we will have an upward bias as the Obama Faith fest returns to center stage. It will probably be another bear trap, with a downward spiral coming back into play in February, in rough conformance with your map.

I have always held the view that it would take the peak oil supply crunch to start a real, long-lasting deflationary spiral, and 2010 has been the year on my map. Maybe the financial spiral will indeed keep on keeping on this year. I have taken many actions to prepare for that contingency. But I view 2009 as maddening in ability to confound forecasting. I would not be surprised if we see a giant stock market bounce of 50% up or more at some point in the year, fueled by the perception that a bottom has hit and as trillions in liquidity runs away from the US Treasury bubble. But once peak oil comes back to bite us in the arse and it is not possible to hide what is going on, the next down cycle in the non-resource market will likely form a longer-term trend.

For readers here, I will say that just owning gold and cash and maybe some energy stocks (a mix of cash is best … Euro, Canadian Dollar, Chinese currency) is a reasonable hedge.

Keep your spirit strong,

Eric; 2:26 PM
zeusij said...: If gold is to spike here in the next year or so. Would it be wise to invest in physical gold on credit? This is something I've been considering for some time now.; 3:41 PM
Unknown said...: Hi Mike, ftw bloggers
I want to thank you for your empathy and helpful suggestions. A part of me expected to hear that I 'should know better' by now - Mike's map has been clear and correct for YEARS,after all - instead, you validated my feelings and thoughts, and most of all - let me know I'm not the only one who sees what's coming, but still hasn't figured out to position myself for it.

Mike, Many thanks to you and your oh so accurate foresight. Many thanks to this community (yes!) for posting news I wouldn't find elsewhere.; 6:12 PM
Unknown said...: Hi MCR, Jenna et al,
Sitting back here in the endless sun that is Australia I started to read "From the Wilderness" every post from the day I discovered it a good few years ago.
I started to think, how the hell is this all going to end, how can I help, what can I do?
I haven't found the answers to any of the questions but my sceptic levels (Concerning our leaders) have risen to the near dangerous levels.
Mike, you have opened my eyes, and I've been able to open those of others. Not enough others, unfortunately!
However, comma, the media machine that is government, big business and Skull and Bones amongst others have somehow contrived to continually keep the salient facts and agendas from the punters, (sorry) voters.
Rupert Murdoch is lucky now to be an American. Should he ever return to these shores for whatever reason, I should like to have him tried as not only a traitor to OZ but to mankind as well.
He and his ilk are guilty of the moral rape and dereliction of the minds of the populace world wide.
The ability of his very "Popular Press" to influence our every day's judgements will only end when there is a computer linked to the web in every dissenting home in every country. Long live the $100 computer! Will he and his mates allow it?; 3:28 AM
AR said...: A Trip to Todd's at The Oil Drum: Campfireis the real deal on self-reliant living off-grid, growing one's own food.; 11:08 AM

From the Wilderness' Peak Oil Blog

Tuesday, January 20, 2009

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