The Porn Dude

Welcome to the first day of trading in 2016

sdw

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Jul 14, 2005
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It seems that we have an abundance of bad news today.

Iran and Saudi Arabia are nearing the end game in the mid east. Which country is going to provide refuge for the Saudi Royal Family? I think that the Saudi Royal Family has harvested just about all the money it can from the Saudi Oil Fields and the new regime will be cutting production within the next year/18 months. Life is going to get exciting in June/July this year.

This should have a positive effect on World Jihad because the Sunni radicals are going to need to withdraw into Saudi Arabia to protect their religious monuments from being taken under control by the Shiites.

The other positive effect will be that Oil Prices will begin to recover.

In China the Shanghai stock exchange has been suspended for today after a 7% drop upon opening. This will repeat tomorrow as people try to sell.

Everywhere else, the hedge funds that are holding BRIC (Brazil, Russia, India, China) based funds are selling. We are looking at large drops and probably having trading suspended in major American/Canadian exchanges. Right now we are looking at an opening drop of 1-2% and it's looking like we will be lucky if the drop is only 3% at the close of trading. I think it's going to be more which is going to lead to redemption pressure as people with RRSPs and other investment instruments try to get their money back. The redemption pressure will lead to a liquidity crisis in the near future.
 

sdw

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I don't think that I will be buying what the author refers to as "fantasy stocks" on this dip. Fantasy stocks are all things that people with too much money buy when the world is ticking over like a cat's purr.
I don't think that that's what we are going to see this year. I will be buying some energy stocks if the price drops into my range and the same applies to manufacturing of durable goods. Things that people can choose to not buy at all, or can put off until things improve - aren't likely to do well in the short/medium term.
 

badbadboy

Well-known member
Nov 2, 2006
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In Lust Mostly
I'm afraid to look.

My broker was happy with only losing 6% last year while the historical average of the TSE was down 13%.

Where to put money that doesn't continue to lose value is the toughest question for me? Probably others too.
 

LLLurkJ2

Keep on peeping
Jul 6, 2015
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Does this mean the Vancouver real estate will continue to skyrocket? It does seem like it's become the new gold.
 

sdw

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Does this mean the Vancouver real estate will continue to skyrocket? It does seem like it's become the new gold.
It's certainly where Asian Investors sock away their money. The Chinese government is attempting to stem the flow and if they succeed, the fuel for the Vancouver market will be gone. Also if the Banks get really hurt with the collapse of BRIC investments, it may be more difficult to mortgage real estate if it doesn't fall into CMHC mortgage insurance guidelines.
 

Tugela

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Oct 26, 2010
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It seems that we have an abundance of bad news today.

Iran and Saudi Arabia are nearing the end game in the mid east. Which country is going to provide refuge for the Saudi Royal Family? I think that the Saudi Royal Family has harvested just about all the money it can from the Saudi Oil Fields and the new regime will be cutting production within the next year/18 months. Life is going to get exciting in June/July this year.

This should have a positive effect on World Jihad because the Sunni radicals are going to need to withdraw into Saudi Arabia to protect their religious monuments from being taken under control by the Shiites.

The other positive effect will be that Oil Prices will begin to recover.

In China the Shanghai stock exchange has been suspended for today after a 7% drop upon opening. This will repeat tomorrow as people try to sell.

Everywhere else, the hedge funds that are holding BRIC (Brazil, Russia, India, China) based funds are selling. We are looking at large drops and probably having trading suspended in major American/Canadian exchanges. Right now we are looking at an opening drop of 1-2% and it's looking like we will be lucky if the drop is only 3% at the close of trading. I think it's going to be more which is going to lead to redemption pressure as people with RRSPs and other investment instruments try to get their money back. The redemption pressure will lead to a liquidity crisis in the near future.
What are you talking about? Saudi Arabia is a Sunni country. The royal family are not going anywhere because most of the people who live there don't have a problem with some Shia cleric being executed. Iran may not be happy about it, but there isn't anything they can do about it.
 

sdw

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Jul 14, 2005
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What are you talking about? Saudi Arabia is a Sunni country. The royal family are not going anywhere because most of the people who live there don't have a problem with some Shia cleric being executed. Iran may not be happy about it, but there isn't anything they can do about it.
Maybe you should actually know something before you spout shit. The Saudi Royal Family is Sunni, the Wahhabi/Salafi Mission that the Royal Family pays Danegeld to are Sunni. At least 25% of the Muslim population is Shia. The Shia in Yemen have been in revolution since 2004 and despite the efforts of Saudi Arabia to support the Yemeni government, the Shia are winning. The Shia in Saudi Arabia try to get international cover, but the "Arab Spring" hasn't worked very well where the Internationalists did cause regime change and powerful governments want Saudi Oil. The cleric Nimr Baqr al-Nimr was aligned with the Yemeni Revolutionaries and powerful in Al-Awamiyah. He was also closely aligned with Sayyid Mohammad Taqi al-Modarresi an Iranian cleric who is a leader of the Islamic Action Organization.

The Saudi Royal Family and the Wahhabi/Salafi considered al-Nimr a direct threat for a number of reasons:
1. Al-Awamiyah is a town in the middle of the Eastern Province Oil Fields and Pipelines.
2. Since at least 2005 al-Nimr has been loudly advocating the removal of the Saudi Royal Family and an "Opening" of Muslim practice in Saudi Arabia that threatens the power of the Wahhabi/Salafi.
3. Al-Modarresi and al-Nimr were involved in the Shia attempt to control the government of Iraq. While they won the election, they have lost the support of the people.

So, the fact that Saudi Arabia is officially Sunni by government and Wahhabi/Salafi Fiat isn't matched by reality on the ground. Especially with the Iranian support in arms, money and people.

That's why Saudi Arabia executed al-Nimr. It's probably a mistake because the Saudi Royal Family doesn't enjoy the support of the majority of the population and the Wahhabi/Salafi clerics that run the religious police in Saudi Arabia are considered to have abused their power by much of the population.

The Saudi Royal Family is well aware that they are only barely tolerated in Saudi Arabia. That's why they are pumping the Oil out of the ground just as fast as they can.
 
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sdw

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What is happening in Saudi Arabia is very much related to the "Arab Spring". Most of the Middle East was ruled by fairly brutal Dictators. The population, with the support of the West started to have mass demonstrations for Democratic government. https://en.wikipedia.org/wiki/Arab_Spring
By the end of February 2012, rulers had been forced from power in Tunisia,[1] Egypt,[2] Libya,[3] and Yemen;[4] civil uprisings had erupted in Bahrain[5] and Syria;[6] major protests had broken out in Algeria,[7] Iraq,[8] Jordan,[9] Kuwait,[10] Morocco,[11] and Sudan;[12] and minor protests had occurred in Mauritania,[13] Oman,[14] Saudi Arabia,[15] Djibouti,[16] Western Sahara,[17] and Palestine. Weapons and Tuareg fighters returning from the Libyan Civil War stoked a simmering conflict in Mali which has been described as "fallout" from the Arab Spring in North Africa.[18]
I think that most people would agree that the "Arab Spring" was a failure. It's hard to point to anywhere that replacement of the Dictator resulted in a Free, Democratic Government and all to easy to point at the masses of people being killed in Libya, Egypt, Sudan and especially Syria.

Saudi Arabia basically ensured that it's population understood that revolution against the government equaled Death. The Saud Government can and has used tanks to crush protesters. As they demonstrated a few days ago, they will publicly and brutally kill anyone who disagrees with them.

The Saud Royal Family and the Wahhabi mission have had an agreement since the 1930s. The Wahhabi give the Saud family religious cover and the Saud family finances the Wahhabi projects in support of the Sunni faction of Islam. Currently, the largest financial supporter of ISIS is the Wahhabi mission, which, in reality, is the Saud Royal Family.

The problem is that the Saud Royal Family decided to kill off the competition in the Oil Industry. They couldn't tolerate the Canadian Oil Sands or the Shale Oil projects. The Saud Royal Family also knows that when they can no longer buy off the Wahhabi mission and their population - they will meet with a very messy, brutal end.

Their answer to both problems was to pump as much oil as they can, and to move the resulting money out of Saudi Arabia as fast as they possibly could.

The result is that Saudi Arabia is broke. The IMF says that they won't be able to support their population's living standard in 5 years. This is beginning to result in taxes in a country that has no income tax, no consumption/luxury tax, very few hidden taxes. The government recently raised the price of Gas from 16 cents to 24 cents a liter.
http://money.cnn.com/2016/01/05/news/economy/saudi-arabia-oil-budget-gas/
The gas hike is just the beginning. Water and electricity prices are also going up, and the government is scaling back spending on roads, buildings and other infrastructure.

Those cuts might sound normal for any government that is running low on cash. But it's especially problematic in Saudi Arabia because the vast majority of Saudis work in the public sector.

About 75% of the Saudi government's budget comes from oil. The price of oil has crashed from over $100 a barrel in 2014 to around $36 currently. Most experts don't expect a rebound anytime soon.

The Saudi government used its vast oil wealth to provide generous benefits to its citizens. When the Arab Spring rocked the Middle East in 2011, the Saudi king spent even more in an effort to subdue any discontent in the country.

The perks Saudis receive:

Here are some of the perks Saudis receive:

-Heavily subsidized gas (It used to be 16 cents a liter. Now it's gone up to 24 cents.)
-Free health care
-Free schooling
-Subsidized water and electricity
-No income tax
-Public pensions
-Nearly 90% of Saudis are employed by the government
-Often higher pay for government jobs than private sector ones
-Unemployment benefits (started in 2011 in reaction to the Arab Spring)
-A "development fund" that provides interest-free loans to help families buy homes and start businesses.

Saudi Arabia may have to start taxing its people

Now Saudi Arabia can't pay for all those benefits. It ran a deficit of nearly $100 billion last year and expects something similar this year, if not worse.

The International Monetary Fund recently predicted that Saudi Arabia could run out of cash in five years or less if oil stays below $50 a barrel.

"The Saudis have used their economic power to buy off their population," says Jordan, who is currently serving as diplomat in residence at Southern Methodist University.

He predicts Saudi Arabia may even have to start collecting an income tax or sales tax.

"Part of the leverage the regime has had on their people is that they don't impose taxes and therefore people don't expect representation," Jordan says. "But once they pay taxes, you're likely to see an increase in political unrest."

Unemployment is already high in the country. Official statistics put it at about 12%, but experts say it's likely much higher since many Saudis don't even look for work.
The executions were a delaying tactic. The Sauds were basically saying "revolution still means death". The Saud Royal Family wants a little more time to remove what is theirs from Saudi Arabia. They really do consider all wealth in Saudi Arabia to be theirs. Saudi Arabia is the result of wars of conquest by their great grandfather from 1918 onwards to about 1932/38 when the International community recognized the reality on the ground and granted that the Saud Royal Family controlled what we know as Saudi Arabia.

Many governments and journalists have recognized this truth for years. It's why the US was quick to react militarily in 1993 and 2003, it's why Canada participates in the anti-piracy/sanctions inspection patrols in the Persian Gulf. The West wants the Oil just as much as the Saud Royal Family wants to sell it before leaving Saudi Arabia. Leaving a vast reserve of Oil to the Wahhabi/Salafi fanatics is not what Western Governments have in mind. It's why the Trudeau Government has agreed to sell the armored vehicles to the Sauds - probably after a "real-politic" briefing by other western governments.

The problem for the Saud Royal Family, the Wahhabi mission and the desires of the Western Governments is Iran. Saudi Arabia has 25% or more Shia, many with direct family connections with Iran. The Shia in Saudi Arabia have been brutalized along with any other minority, any other dissenter with the Saud/Wahhabi order of things.

Now that the Saud Royal Family is cutting back their danegeld to the Wahhabi and the population, it's only a matter of time until they seek new homes in Western Nations. They already own substantial assets in America and Europe, what they want is the political cover so that courts won't order them to return money to Saudi Arabia.

http://news.nationalpost.com/full-c...udi-rift-with-iran-pits-zealot-against-zealot
http://qz.com/582465/saudi-arabia-is-paying-a-huge-price-for-its-war-on-shale-oil/
http://www.cbc.ca/news/world/saudi-iran-feud-brian-stewart-1.3390971
 
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sdw

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Two articles:

The first is a Globe and Mail article on the Armoured Vehicles that the Trudeau Government is selling to the Saud Royal Family. Definitely configured as an anti-riot, anti-revolution vehicle. 105mm main gun, perfect for taking out barricades of cars and DIY armoured cars of welded steel plates on a truck chassis. The Globe and Mail admits/states that these vehicles are to "preserve the rule of the Saud Royal Family". The vehicle is designed to be slung under a helicopter or transported easily in a C130. Unlike most Armoured Vehicles, this is a quick response vehicle with a pretty decent road speed. http://www.theglobeandmail.com/news...-deal-will-pack-lethal-punch/article28046099/

The second is a Vancouver Sun/National Post article on the very quick, very large fall in Chinese Stock Prices. The writer argues that we are going to see much of the proceeds from the sale of these stocks in the Vancouver Real Estate Market. The writer is probably correct. The writer also argues that the fall in the Stock Market has nothing to do with the intrinsic value of the stocks's corporation. The stocks are being sold because the Chinese government has devalued the Yuan and is conducting an "anti-corruption" campaign. To retain the stocks would be to risk the value being devalued or even seized by the government as "proceeds of corruption". Of course, the wealth is probably the proceeds of corruption. http://www.vancouversun.com/busines...vancouver/11636340/story.html?__lsa=a8cd-aaf5
 

Sporting

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Feb 7, 2010
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Thanks for all this perspective. I hate to say it, don't you think we need a National Energy Policy to protect our domestic producers?. It is pointless for them to scale back when we are importing oil from rogue Muslim and other OPEC states, which is enabling their offensive behavior and endangering the lives of millions of innocent people. This price crash will probably last 16-12 months, and then domestic producers will have to mobilize it again. Why not just subsidize with loans for the time being, and cut off/starve the Arab States?
 

sdw

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Thanks for all this perspective. I hate to say it, don't you think we need a National Energy Policy to protect our domestic producers?. It is pointless for them to scale back when we are importing oil from rogue Muslim and other OPEC states, which is enabling their offensive behavior and endangering the lives of millions of innocent people. This price crash will probably last 16-12 months, and then domestic producers will have to mobilize it again. Why not just subsidize with loans for the time being, and cut off/starve the Arab States?
Pierre Elliott Trudeau tried to have a national energy policy. Talk to any Albertan about how well that worked. Since then, any effort to push a pipeline from Alberta to either coast has been stopped.

The Gateway project through Northern BC isn't likely to continue under the current economic conditions and it would surprise me if Kinder Morgan didn't abandon their effort to twin their existing pipeline. There was a project to supply the Eastern refineries by reversing the flow of an existing pipeline, but that probably will also be shut down now. None of them could be built during good times because of protests and obstructionism and now we are in bad times where it makes no economic sense to spend the money building them.

Oil Sands projects are being "Shut In" the way they were in the 1980s and Fort McMurray is going to have an migration out of there. In the 1980s there were 3 Bank failures because of the Oil Sands being shut down. That can't happen this time with the mortgage and bankruptcy rules as they were rewritten as a result of that. There are going to be people that have debt for their over priced Fort McMurray house following them where ever they go.

There are massive amounts of Oil being stored away in just about any storage capacity that exists and Iran hasn't even started to pump their Oil. Iran will be pumping Oil, even at these prices, because they are spending a fair bit supporting Shia efforts in Lebanon, Syria, Iraq and Yemen. Just to list a few.

Even if Saudi Arabia completely stopped pumping Oil tomorrow morning, there is currently about 2 years supply of Oil in storage. And that doesn't even count the Oil that is "Shut In" but easily re-started by nations like Russia and Venezuela.

Today, Saudi Arabia announced that the Saud Royal Family is selling it's shares in the Saudi Arabian Oil Corporation Saudi Aramco to international investors. I'm absolutely convinced that the Saud Royals are moving every last dime out of Saudi Arabia.

You also have to remember that governments don't get much out of giving money to Multi-National Corporations. There is always the warning in the time Canada and Ontario gave money to Bendix - - who then built their new plant in Minnesota. Currently, Multi-Nationals have over 1.5 Trillion dollars socked away off-shore. They don't pay taxes on that money in the US or Canada, they aren't creating jobs in the US or Canada. The reality is they are making a very substantial bet against our governments.
 

westwoody

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Jun 10, 2004
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Trudeau was told to deepen relationships with Saudi Arabia
Saudi is a revolution waiting to happen.
The royal family does indeed regard the entire kingdom as their personal property. Their contempt for the people living there is ridiculous.
They are getting more and more extreme in their counter revolutionary measures but they will fall. I hope Canada does NOT give any members of the corrupt family refuge. People will be hunting them for revenge. Having them here will only bring violence down on our own heads.
I have family members working there and I wish they would get the hell out. But they say they are getting paid so well, or they have to complete their contract.
It is just like what happened in Iran. My dad had a couple of friends working there for the Shah. They were making huge money....and then lost everything but the clothes they were wearing. At least they got out in one piece. If ISIS takes over Saudi Arabia western infidels will be up shit creek.
 

sdw

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Jul 14, 2005
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Saudi is a revolution waiting to happen.
The royal family does indeed regard the entire kingdom as their personal property. Their contempt for the people living there is ridiculous.
They are getting more and more extreme in their counter revolutionary measures but they will fall. I hope Canada does NOT give any members of the corrupt family refuge. People will be hunting them for revenge. Having them here will only bring violence down on our own heads.
I have family members working there and I wish they would get the hell out. But they say they are getting paid so well, or they have to complete their contract.
It is just like what happened in Iran. My dad had a couple of friends working there for the Shah. They were making huge money....and then lost everything but the clothes they were wearing. At least they got out in one piece. If ISIS takes over Saudi Arabia western infidels will be up shit creek.
I think that the danger of who controls the Saudi Arabian Oil Fields is why Western Governments are determined to support the Saud Royal Family as long as possible. It's certainly the reason that some Real Politic was done on the sale of the Armoured Vehicles. Apparently there are going to be 700 delivered.

The Oil Drum and the Peak Oil people were reporting that Saudi Arabia's Oil Fields were dangerously depleted. I hope that they were right and that the Saud Royal's effort to pump as much as they can means that there won't be easily recoverable Oil soon. Then, there is the sale of Aramco shares by the Saud Royals.

Everything points to them seeking another home. It'll probably be France. France has a little bit of a history that way.

I agree that some greedy people just never see the writing on the wall. But then, even a week before the Federal Election, people were saying the Liberals couldn't get a majority. The information will be there, but people will insist on reading it the way they want it to be.

One thing, we are going to have an interesting year.
 

Tugela

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Oct 26, 2010
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Maybe you should actually know something before you spout shit. The Saudi Royal Family is Sunni, the Wahhabi/Salafi Mission that the Royal Family pays Danegeld to are Sunni. At least 25% of the Muslim population is Shia. The Shia in Yemen have been in revolution since 2004 and despite the efforts of Saudi Arabia to support the Yemeni government, the Shia are winning. The Shia in Saudi Arabia try to get international cover, but the "Arab Spring" hasn't worked very well where the Internationalists did cause regime change and powerful governments want Saudi Oil. The cleric Nimr Baqr al-Nimr was aligned with the Yemeni Revolutionaries and powerful in Al-Awamiyah. He was also closely aligned with Sayyid Mohammad Taqi al-Modarresi an Iranian cleric who is a leader of the Islamic Action Organization.

The Saudi Royal Family and the Wahhabi/Salafi considered al-Nimr a direct threat for a number of reasons:
1. Al-Awamiyah is a town in the middle of the Eastern Province Oil Fields and Pipelines.
2. Since at least 2005 al-Nimr has been loudly advocating the removal of the Saudi Royal Family and an "Opening" of Muslim practice in Saudi Arabia that threatens the power of the Wahhabi/Salafi.
3. Al-Modarresi and al-Nimr were involved in the Shia attempt to control the government of Iraq. While they won the election, they have lost the support of the people.

So, the fact that Saudi Arabia is officially Sunni by government and Wahhabi/Salafi Fiat isn't matched by reality on the ground. Especially with the Iranian support in arms, money and people.

That's why Saudi Arabia executed al-Nimr. It's probably a mistake because the Saudi Royal Family doesn't enjoy the support of the majority of the population and the Wahhabi/Salafi clerics that run the religious police in Saudi Arabia are considered to have abused their power by much of the population.

The Saudi Royal Family is well aware that they are only barely tolerated in Saudi Arabia. That's why they are pumping the Oil out of the ground just as fast as they can.
Not in Saudi Arabia. The Shia population is a small minority there. They are in the majority only in Iraq and Iran, plus a few smaller countries. In most Islamic countries they compose about 10% or less of the population. They are discriminated against because many Sunni regard them as heretics, that causes at least a few to engage in sedition or terrorism which in turn results in a general fear of them in the greater population, which causes more discrimination and so on.

The Saudi population is NOT going to rise up in revolt because some Shia cleric and bunch of related guys who are promoting ideals they don't approve of got executed. That might happen in a place like Bahrain, but not in Saudi Arabia.
 

Tugela

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Oct 26, 2010
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Saudi is a revolution waiting to happen.
The royal family does indeed regard the entire kingdom as their personal property. Their contempt for the people living there is ridiculous.
They are getting more and more extreme in their counter revolutionary measures but they will fall. I hope Canada does NOT give any members of the corrupt family refuge. People will be hunting them for revenge. Having them here will only bring violence down on our own heads.
I have family members working there and I wish they would get the hell out. But they say they are getting paid so well, or they have to complete their contract.
It is just like what happened in Iran. My dad had a couple of friends working there for the Shah. They were making huge money....and then lost everything but the clothes they were wearing. At least they got out in one piece. If ISIS takes over Saudi Arabia western infidels will be up shit creek.
If ISIS took over Saudi Arabia they wouldn't have even bothered giving that cleric a trial, they would have taken him outside and cut his head off simply for being a Shia cleric.
 

Tugela

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Oct 26, 2010
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I think that the danger of who controls the Saudi Arabian Oil Fields is why Western Governments are determined to support the Saud Royal Family as long as possible. It's certainly the reason that some Real Politic was done on the sale of the Armoured Vehicles. Apparently there are going to be 700 delivered.

The Oil Drum and the Peak Oil people were reporting that Saudi Arabia's Oil Fields were dangerously depleted. I hope that they were right and that the Saud Royal's effort to pump as much as they can means that there won't be easily recoverable Oil soon. Then, there is the sale of Aramco shares by the Saud Royals.

Everything points to them seeking another home. It'll probably be France. France has a little bit of a history that way.

I agree that some greedy people just never see the writing on the wall. But then, even a week before the Federal Election, people were saying the Liberals couldn't get a majority. The information will be there, but people will insist on reading it the way they want it to be.

One thing, we are going to have an interesting year.
I see. So your theory is that we are sending them arms to prop them up, because otherwise they might not sell oil to us that we don't need because we already produce our own?

There is a glut of oil on the world market, you say Saudi Arabia is going to run out soon, and then we want to prop them up? Why? There is plenty of oil available from other countries, and if Saudi Arabia is running out why would we care who is in charge?

Just about the only major industrialized country that *might* care is China. And are they "propping up the Saudis"?.
 

sdw

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Jul 14, 2005
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I thought it may be interesting to look at Oil production in 2013 before Saudi Arabia started pumping like mad and in 2015 with Saudi Arabia pumping like mad.

In 2013, OPEC Oil production was about 37 mbpd and Saudi Arabia was producing about 12 mbpd


In 2015, OPEC Oil production was about 31 mbpd and Saudi Arabia was producing about 10 mbpd. What? Where is the unused Oil coming from?


Oh, well that's a surprise. The extra Oil is coming from the USA who went from about 8 mbpd to 12 mbpd.


So, lets look at who is drilling. The USA is losing rigs. Which means they are depleting existing fields and not adding new fields.


OPEC and especially Saudi Arabia are drilling like mad. Which means they are increasing production capacity on existing fields to get every last drop.


Total Oil production is up quite a bit


There is an interesting game being played here. The Multi-Nationals (BP, Chevron, Shell, Exxon) seem to be willing to deplete their existing wells just as fast as Saudi Arabia is depleting their Oil Fields. And yet, the Oil Sands and New Shale Oil are being Shut In. Shale Oil that is already in production may be one of the reasons that the USA's production is so high. Shale Oil, unlike conventional Oil wells, can't be shut in once it's producing.
 
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