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Author Topic: ? About Petroleum Prices  (Read 3066 times)

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Re: ? About Petroleum Prices
« Reply #15 on: January 13, 2016, 03:05:56 pm »

I live in PA and drive past my share of construction workers as they are rebuilding/repairing roads all over PA.

The vast majority of the time I see multiple guys standing around watching one guy work.  The man hours involved must be staggering and at my last heavy equipment type job any work we did for the states was at union rates.  If I remember correctly the last state work I did paid 24 bucks hour.

I do not know how many guys work on state road jobs in the summer but I would be willing to bet there are thousands.   So say 1000 guys on the job with a 50% participation rate throughout the day at 24 bucks an hour. 500 guys at 24 and hour for 8 hours a day is 96,000 FRN.

A day.

Factor in that the job now takes longer to do and pay out 96 grand a day in wages plus all the equipment, maintenance and fuel costs for the extra time to do the job and it quickly becomes a very large number.
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MamaLiberty

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Re: ? About Petroleum Prices
« Reply #16 on: January 14, 2016, 05:25:11 am »

Used to see a lot of that in Calif. Six guys holding shovels, only one actually doing anything with it. Here I see road crews frequently, since the zero weather is hard on pavement, and I can't remember ever seeing anyone just standing around watching someone work. The crews here tend to be small and they work like beavers.  I don't know what they get paid.
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MamaLiberty

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Re: ? About Petroleum Prices
« Reply #17 on: January 18, 2016, 08:32:50 am »

Michigan Becomes First State to Welcome Back Sub-$1 Gas
http://www.fox5ny.com/news/76795410-story

I just did a search here on "gas prices" and had to chuckle at all of the anxiety over the last ten years about high gas prices, and "ever increasing" prices.

Recession is here... and lots of prices are going to tank. Right along with wages, of course.
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Rarick

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Re: ? About Petroleum Prices
« Reply #18 on: January 18, 2016, 09:18:45 am »

Amory Lovins talked about a large set of gas price yoyos when the market started reaching criticality.  Could we be starting into that, or an artificially incuded set of yo yo's aimed at economic warfare?

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Most of the time news is about the same old violations of the first principles of consent and golden rule with a dash of force thrown in........ with just enough duct tape to be believable.

MamaLiberty

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Re: ? About Petroleum Prices
« Reply #19 on: January 18, 2016, 09:59:04 am »

Amory Lovins talked about a large set of gas price yoyos when the market started reaching criticality.  Could we be starting into that, or an artificially incuded set of yo yo's aimed at economic warfare?

Or maybe simply a market correction, since there is probably no more blood to squeeze out of the turnip. The "managed" market is a failure and there isn't any way to actually control it. No massive conspiracy or "artificial" elements required.
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Silver

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Re: ? About Petroleum Prices
« Reply #20 on: January 18, 2016, 01:04:03 pm »

This is classic ABC - Austrian Business Cycle theory.

The fed pushes the cost of money and credit to well below market levels by creating Trillions of new dollars from nothing.

The low cost of borrowing stupendous sums allows well-connected players (think big banks, big corporations, big government) to take on huge amounts of debt with very little interest cost.  This makes the spreadsheets show positive return on investments, when they would show a huge loss if true market rates for the cost of borrowed money were applied.

This leads to massive mal-investment, putting money into things that don't make sense except because of the low cost of money.

In an honest market, a low cost of money happens when savers have saved so much that they are willing to lend money for a better return.  Their willingness to lend money sends a signal to entrepreneurs that there is pent-up demand for goods.

But there is no pent-up demand, the American consumer is tapped out, with credit cards maxed out and lines of credit on home mortgages and auto payments.  The typical "upper middle class" American is a two thousandaire, has no equity in their home, just monthly mortgage payment(s), two new cars in the driveway on lease or no money down loans, student loans piling up, and $2,000 in savings.  They are one layoff, one missed paycheck, one medical or major appliance failure away from bankruptcy. 

But the businessmen and entrepenuers who have to look 10 or 20 years into the future to determine what consumers might need then can't help but be fooled by the siren song of low cost money.  The time from prospecting for a mine or surveying a potential oil field to actual production is at least 10 years.

So the mal-investments end up in capital-intensive infrastructure projects like mines, wells, pipelines, ships, and factories.  In China they've built too many factories.  In the US the tax and labor laws make manufacturing a fool's game, so the tsunami of money went into oil shale and fracking.  In Canada it went into oil tar sands.

Today a barrel of bitumen from Canadian oil sands, won at great cost in both men, machinery, and energy, sells for a little over $8. The production cost is well over $40.  But shutting down a field can permanently damage the formation, so they continue to pump at a loss.

All of those malinvestments were made with newly created credit from nothing, but they consumed real resource.  Men, steel, energy, engineering time, construction equipment, housing and food for workers in far-off places, the list goes on and on.

These are all wasted.  You can't undrill a well, and undig a mine.  The boom towns become ghost towns, the investments in materials and labor gone.  Worthless.

So it is small consolation that gas and oil prices may be low for a while, perhaps a long while.  Because in truth the entire planet has been made poorer by this farce.  We've used fake money to squander real resources, scarce resources that would have been put to genuinely profitable and helpful uses if not for the machinations of the fed and their bankster ilk.

It is not an act of economic warfare, and the economically ignorant orator Lovins has no clue, although that never makes him shut up.  It is the free market responding to over a decade of systematic abuse.  It is reality setting in.  It is showing up in oil because the supply exceeds the demand, and there is no longer enough storage to dissemble about that fact.

Peace,

Silver
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Rarick

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Re: ? About Petroleum Prices
« Reply #21 on: January 18, 2016, 03:37:22 pm »

Okay, that was the tart as usual rejoinder I was expecting. 
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........Duct tape is like the force, it has a light side, a darkside and holds the universe together.  It is theoretically reinforced with strings too.  (The dome has a darkside, lightside and strings of rebar for reinforcement too!)
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Most of the time news is about the same old violations of the first principles of consent and golden rule with a dash of force thrown in........ with just enough duct tape to be believable.

MamaLiberty

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Re: ? About Petroleum Prices
« Reply #22 on: January 18, 2016, 04:47:59 pm »

Okay, that was the tart as usual rejoinder I was expecting.

You'd rather be lied to and kissi-pooed?  :laugh: :laugh: :laugh:
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Rarick

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Re: ? About Petroleum Prices
« Reply #23 on: January 19, 2016, 04:12:13 am »

No QQ here.
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........Duct tape is like the force, it has a light side, a darkside and holds the universe together.  It is theoretically reinforced with strings too.  (The dome has a darkside, lightside and strings of rebar for reinforcement too!)
-------------------------------------------
Most of the time news is about the same old violations of the first principles of consent and golden rule with a dash of force thrown in........ with just enough duct tape to be believable.
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