Skip to comments.Plateau Oil meets 125m Chinese cars
Posted on 03/04/2012 6:35:42 PM PST by bruinbirdman
Oil spikes usually metastasize once energy costs reach 9pc of global GDP. The longer they stay there, the greater the damage.
Rush hour in Beijing: the battle for oil will intensify as China alone adds 125m cars to its roads over the next five years
That proved to be the pain barrier in the 1970s and again in 2008, and we are just shy of that level right now. Oil is already capturing a higher level of European GDP than in 2008, said Francisco Blanch from Bank of America.
The rule of thumb is that a 10pc rise in crude cuts US growth by 0.2pc four quarters later, but the science is flabbily soft and nobody knows where the inflexion point lies. The effect is famously non-linear. Nothing much seems to happen until confidence suddenly snaps.
What is deeply troubling is that Brent crude should have reached fresh records in sterling (£79) and euros (94) - with a knock-on effect on US petrol prices, mostly tracking Brent - even though the International Monetary Fund has sharply downgraded its world growth forecast to 3.25pc this year from 4pc in September, and even though International Energy Agency (IEA) has cut its oil use forecast for this year by 750,000 barrels per day (bpd).
Oil is not supposed to ratchet defiantly upwards in a downturn, which is what we have with the Euro zone facing a year of contraction in 2012, and much of the Latin bloc sliding into full depression. Japans economy shrank in the fourth quarter.
Asias emerging powers of Asia - the key force driving the commodity boom of the last decade - are in various stages of soft-landings after hitting the monetary brakes last year to check property bubbles and curb inflation. Chinas manufacturing
(Excerpt) Read more at telegraph.co.uk ...
125m cars in the next 5 years... 25m per year... and barely one from the US
meanwhile, the commies/progressives/socialists in our own country do everything they can to undermine our economy at home
this should teach the go-go globalists that pumping china doesn’t mean it’ll help the US or American profits. of course, the free-trading go-go globalists aren’t about helping the US... just themselves.
and helping china build its manufacturing infrastructure on US dollars is a win-win for them
Farmer Jones of North Dakota heads for OPEC
Solyndra tried to manufacture solar panels. The Obammunist gave his comrades half a billion bucks to do it.
Solyndra announced its bankruptcy two days after Senator Harry Reid cut the ribbon on a new ChiCom solar panel plant in southern Nevada. Reid also secured the lease of about 5,000 adjoining acres so the ChiComs can use their panels to produce electricity for sale to their comrades in California.
So the question to President Obammunist is, why hasn't he touted the ChiCom solar panel plant being built with no Obamma Bucks, only the cut rate land lease, just south of his ranch, arranged by Dirty Harry Reid.
Now Senator Reid is cutting a nifty real estate deal in a down market to build 1300 houses near Loughlin, Nevada to house the ChiCom employees.
Don't see much about this in the papers, eh.
Now that would be a headline,
Solyndra Declares Bankruptcy Because Obamma Funds ChiCom Rival
China is buying all the oil they can get. What they can’t use they are storing as a long term investment.
Why did the USSR implode? Its only source of hard money was oil exports. Jimmy Carter ran the price up pretty high.
Ronald Reagan convinced the Soudis that Russia would go bankrupt with low oil prices.
How low did it go? Under 20 bucks from '87-'90. Good by USSR.
Maybe ChiComs think they can corner the oil market with their trillions of surplus and The Obammunist's help.
Can't corner the oil market now as the price will follow a demand curve. But the Chinese build things they don't yet need (Ghost Cities) because they have the handy cash and cheap labor.
I doubt many of those 125 million automobiles are for the rural folks.
They can keep the price of oil up (stockpile) to cause havoc in the West?
That they can do, but only at their own peril
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