3rd largest bank in the world predicts US financial market meltdown
Posted June 28th, 2008 by flavio
output
Fortis is a very large Dutch-Belgian bank, and the 20th largest corporation in the world in terms of revenue.
They recently raised a lot of capital and cancelled their dividend, leaving a lot of people worried about their own solvency. Here's what they had to say:
BRUSSELS/AMSTERDAM - Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion. "We have been saved just in time. The situation in the US is much worse than we thought", says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US
Source: https://www.kitcomm.com/s...
If you guys don't have a vegetable garden, get one going. It's a good investment at any time, and especially now.
EDIT: by the way guys, if you want to keep informed on financials I suggest you check out Ticker Forum, and Karl Denninger's blog. They're really good sources of information, and you'll get news which aren't available through American sources. Karl founded Fed Up USA, a group that organizes public action against the Federal Reserve.
Bookmark/Search this post with:
Inflation corrected,
We have been in a recession for 2-3 years, I am guessing. If the govt says the economy increases by 2-3 percent annually, and we have inflation of 6-10 percent. Heck would it not be close to being called a depression.
Freedom may be worth searching for.
Remember, Dont battle the govt with guns(ALONE), Beat them in court, in state legislature, or hire Ron Paul for president.
Depends...
Keep in mind, real GDP (the figures released by government) factors in the inflation.
I'm not saying that their estimate of inflation is an honest one, but there is an inflationary factor built into that real GDP.
It all depends on how you calculate the inflation that enters into that formula. The government stats on inflation certainly don't point to a recession, but if you believe the stadowstats.com numbers, we've been in a recession for a decade.
I agree that we should find more agreed upon and honest methods for measuring the economy...but really calling it a recession is just semantics...whatever has been occuring in the economy since 2000, it certainly sucks for most Americans.
If you want to further develop this theory...measure nominal GDP growth against a set of inflation numbers that you trust.
This is a HOAX! NOT TRUE! This is a HOAX!!! Fortis story not TR
Please send your signs to:
C Wilkinson
1019 Fremont Ave.
St. Paul, Minnesota 55106
http://www.dailypaul.com/...
Thanks
Thanks for your research. I'm kicking myself for not doing the same thing myself a month ago...when I read this and though what a bunch of BS.
I'll be glad to send some money to your sign cause...just as soon as the nephew of the former dictator of Uganda sends me the 12 million he owes me.
Also...I forwarded the Bill Gates email a few thousand times...still waiting for my millions!
Boogey-boogey-boogey-boogeymen!!!
Ron Paul is the great uniter, the income tax fighter...the military-supported, defender of the border...the political apathy solution and the champion of the Constitution! Doctor Paul is on-call!
Fortis Prediction of US Bank Meltdown a Net Hoax: Urban Legend.
Sorry, brother, Checked it out and it ends up being a hoax. Just another internet hoax.
Boris in Miami
http://www.opednews.com/a...
by Paul Haughey Page 1 of 1 page(s)
www.opednews.com
Tell A Friend
This article documents how an urban legend got started the weekend of June 28-29, 2008, how and why urban legends spread virally, and what you can do to spot them and stop them.
On Sunday, June 29, I received several forwarded articles alleging a large European banking conglomerate predicted a United States financial "meltdown" within coming weeks.
The forwarded story led me to a blog, not a news site, which alleged to provide a one paragraph abbreviation of the story, introduced by the statement "I was shocked to read the following, which was posted 4 hours ago...".
The article alleges that Fortis chairman, Maurice Lippens, expects 6,000 US banks to file for bankruptcy in coming weeks. It mentions that even large financial institutions, such as Citigroup and General Motors, will also be affected, and these events will start a complete financial meltdown in the United States.
STORY DOES NOT HOLD UP TO SCRUTINY
A quick internet search revealed the same abbreviated "article" -- only one paragraph long, with the exact same introductory statement -- has been posted on 269 other blogs and discussion boards. Most of these discussion boards allow anonymous posts, with no accountability required by the poster or author (such as the Sean Hannity fan site, the Ron Paul discussion board, etc). The story can also be found on Digg and other viral marketing and web ring sites, and I predict that you will probably see this many more times, on discussion boards or in emails, for months or years to come.
Most posts also claim that the original story was written in Dutch, and a few even contained a dead link to the alleged original story on Da Telegraaf, a Dutch news submission site. After searching the Da Telegraaf site, I was able to find the original story, which was submitted anonymously. It had no author, it sited no source, it came from no news syndicate (such as Reuters or Associated Press), and it was submitted to no news syndicates.
My first reaction to the story was that it contained all the elements of a net rumor or an urban legend, the kind my grandfather likes to forward to me: Bill Gates will give you $1,000 for forwarding his email; Obama isn't really a US citizen; undocumented Mexican laborers are going to get $1 trillion in free US health care but you are not; car jackers are going to steal your car by putting a flyer on your window; etc.
I next searched every legitimate news site I could think of, including press release sites, blogs or personal web sites by Fortis directors or employees, interviews, oral or written public statements, etc. I found no predictions of 6,000 bankruptcies.
http://www.opednews.com/a...
Please send your signs to:
C Wilkinson
1019 Fremont Ave.
St. Paul, Minnesota 55106
http://www.dailypaul.com/...
They didn't say "5000 in july"
Found the original Dutch article. The guy says indeed that he counts upon the collapse in days or weeks. His remark with the 5000 number may as well be taken as "in the next years", or "as a result".
Ohh
I've been sitting here waiting for 6000 banks to go belly up?
So...in their opinion...has the collapse happened?
I would say no...it would seem that people predicting a huge collapse and a change to life as we know it, have simply been wrong.
that george soros idiot you
that george soros idiot you like.. he's flaming liberal! everything contrary to Ron Paul!
The “change” Obama and his close allies—like George Soros’ Moveon.org —seek is a complete regime change driven by a radical political agenda. For the nation’s gun owners, “change” will take the form of many steps back to the bad old days of the Clinton-Gore years or the Jimmy Carter years, when bureaucrats in a dozen agencies were relentless in their schemes to press a hostile presidential agenda against gun ownership
lots to be proud of there JZ!
as for me and my home, we shall worship the LORD
Economic Forecasts
Economic Forecasts: 1) “The Soviet economy is proof that, contrary to what many skeptics have earlier believed, a socialist command economy can function and even thrive,” said Paul Samuelson in 1989. 2) Question: What’s your advice to the average American who is hurting now, facing the prospect of $4 a gallon gasoline? George Bush: Wait, what did you just say? You’re predicting $4 a gallon gasoline?... I hadn’t heard that. 28 Feb 08 3) “Bear Stears’ balance sheet, liquidity, and capital remain strong,” Alan Schwartz, chief executive, assured us on 12 March 2008, days before their collapse. 4) “The mother lode of [Washington Mutual] is performing awfully well with record growth numbers coming out in the second quarter,” enthused Kerry Killinger, chief executive, on 12 August 2007. They lost over three billion dollars that quarter and, within a year, were worth a tenth of what they traded for then. 5) As a matter of principle, I do not make economic forecasts – see my paper, Did Mises and Hayek Predict the Great Depression? However, I did make one: When a topless dancer sits on one’s lap and brags about the three (soon to be four!) houses that she owns, as one did in 2005, one can’t help but wonder if it might be time to get out of real estate. See Mortgages, Sub-Prime.
Mortgages, Sub-Prime: Loaning money to people who don’t have jobs. See AAA-Rated Securities.
AAA-Rated Securities: The new word for what used to be known as sub-prime mortgages or, more colloquially, as worthless crap. See Fool’s Gold.
Fool's Gold: What the dollar is backed by – the assets of the Federal Reserve, composed mostly of AAA-Rated Securities, which are about as marketable as the chocolate-covered cotton balls that Milo Minderbinder was trying to foist on people in Catch 22. “The Fed’s balance sheet is getting corrupted with junk that others won’t buy or lend against,” observes Robert Robb.
Source: www.axiomaticeconomics.co...
It's July 31st
Today is the last day of July. We have a few more hours until it's over, but I think it's safe to say that no more banks will collapse today.
Well Fortis, you missed your estimates of the catastrophic collapse by about 5997 banks. Thanks dipshits.
This should serve as a lesson to the chicken little's of the world. The sky is not falling.
not in rapid motion but
not in rapid motion but slowly and surley... and its building momentum!
This news can't be true it
This news can't be true it wasn't on fox .
I think Fortis may be wright about the crisis
but wrong about the timing. However, the number of banks going under per month/week is increasing. First Bear Stearns takeover, than a month+ later Indy Mack, Fannie-Freddie bailout, (2) Nevada banks, the watch list has increased from 1 to 9 to 90 in just 1 month. If you look at the progression, it's possible the next few weeks could be wild.
I dont think panic will occur, the general public is to poor and stupid to care. The depression will just be a constant errosion of the banking and investment systems along with jobs.
I think I read somewhere that the average American houshold savings is/was $1300, hardly enough to panic over.
The last Great Depression
...it took five years before people even knew we were in a depression. Don't think this is any different.
Heck, fed govt won't even admit a recession - surprised???
Using pre-WWII metrics,
the US is already in a depression.
___________
Lisa C.
www.dvds4delegates.com=Ron Paul, the 44th U.S. President
“Elections are short term efforts; revolutions are long term projects.”
--Ron Paul
Join the rEVOLution here: www.campaignforliberty.com
Let me correct
We did not have one bank on the FDIC watch list a month ago. I don't remember exactly, but we've been +/- 20 of where the list is now for several years. There's always banks on the watch list.
This is not spiraling out of control. Indymac was destined for this fate. Countrywide spun this bank off and used it as a sacrifice for all of their bad debt, it was doomed from the start. The two banks that just went insolvent were tiny reigional banks...totaled 28 branches...and have already been purchased by Mutual of Omaha.
Part of the problem you're stating is correct...that people in the public don't know and don't care. Another even bigger part of the problem is that people who know what the problem is would rather bitch about it than educate themselves so their armed to convince people of what we can accomplish, if we would only stand up and demand freedom.
Yet our best trained, best educated, best prepared, best equipped troops refust to fight...Thomas Todd
Know doubt banks are always on the watch list,
but I was refering to banks in trouble that the media was actually reporting. I think there should be a ratio to multiply media reportings to equal real world numbers.
JZ said..... Part of the
JZ said.....
Part of the problem you're stating is correct...that people in the public don't know and don't care. Another even bigger part of the problem is that people who know what the problem is would rather bitch about it than educate themselves so their armed to convince people of what we can accomplish, if we would only stand up and demand freedom.
standing up and demanding freedom will have nothing to do with changing the banking rules.. nothing can be accomplished until dumb asses like soros quite buying politicians to do special favors for them.. now talk about supporting freedom soros bankrolls ultra liberal leftists but he is a freedom fighter lol.. nothing can be done till all the idiots in both the senate and congress are kicked out and Men and Women who are honest like Ron Paul, vote and pass legislation that stops Fascism! the education needing done is who the people elect to office who will uphold the CONSTITUTION and get rid of the FEDERAL RESERVE.. at that point things will change! so "standing up and demanding freedom alone " won't accomplish anything.. its whose on capitol hill, that is where the evil either takes hold or freedom springs!
ahh yes the banks are just
ahh yes the banks are just fine!
Jim Sinclair’s Commentary
The silence surrounding this important event is mindboggling.
NAB will shock Wall Street
The Business Spectator
The National Australia Bank's decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”.
We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.
It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble. NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable.
While global banks have been writing down their balance sheet assets, few have tackled their conduit exposures which are off balance sheet but to which they are ultimately liable.
I wish to add one more thing ...
You are correct it is not spiraling out of control yet, and there is at best a very outside shot that it does, but make no mistake, these are not ordinary times.
I predict the potential for a climactic moment in late November, or early December at which point global intervention will probably succeed and we will reach a very low bottom. Something around a DOW 9000, which would be closer to DOW 8000 in January Dollars.
The world markets will be forever altered, and I fear the trend will be towards regulation as opposed to the opposite.
You painted a picture that this is business as usual and I would argue that this is highly, highly unusual.
WAHOR!!
Fortis...you're almost there
They predicted 6000 banks to collapse in July. After last night...we've now had 3.
Only 5997 to go...and still 6 days left in July.
Anyone still trust Fortis?
ahh jz you and your dad jeff
ahh jz you and your dad jeff are making lots of friends here lol!
as for me and my home, we shall worship the LORD
Umm...
You're making moronic assumptions, don't you think?
Jeff23432 (or whatever the number) is either myself writing as another name, or my dad?
Here's some truth here...my Dad is a rank and file neocon who sells cars, and can barely type. I'm pretty sure he's not posting on this site.
Some more truth...I have never personally met anyone who has ever posted on this site (at least to my knowledge).
Here's some more truth. I have never posted on this site (or any site since I was 18 for that matter) as anything except jzneff.
A little more truth...I do not and have never worked in securities, banks, government, or anything else that would lead me to have an agenda.
You think my analysis and opinions are so far fetched that not a human alive would agree with me? You may be of the majority opinion here, but it's not that hard to think that someone in their right mind would share my views.
If you're trying to provoke me into a childish fight, it will not work. I have and will rise above you. Please stop replying to me, it's obvious you don't read what I type before you reply, and I have given up with you. I know what your point of view is, and myself or anyone else here can just go to Jim Sinclaire's website if we need your opinion.
lol right........... exactly
lol right........... exactly what i thought you would say! things getting to you a bit or is it just that time of the month??
as for me and my home, we shall worship the LORD
ahh jz you and your dad jeff
ahh jz you and your dad jeff are making lots of friends here lol!
as for me and my home, we shall worship the LORD
My guess is that the next depression is likely to start sometime
between Q3 2009 and Q2 2010.
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." Benjamin Franklin
---
Bank collapses don't cause depression
The worst this is going to cause is more inflation and longer recession.
I know your intentions are in the best of places...I really recommend that people here read this book.
http://www.lewrockwell.co...
(BTW, I love lewrockwell.com ) Please visit this site, it has some great thought provoking articles.
What you need to understand about depression is that only panic causes them. People panic and do some very irrational things. They run banks, collapsing them. The demand action from congress, who can only manage to cause more problems. They demand presidential orders, which only cause more problems and more depression.
Depression is not inevitable...and WE must be the ones to lead the country into realizing this. This does not have to happen and we have the power to stop it! The world is looking at us and waiting for the solution. We have never had a bigger chance to save ourselves and we're squandering it on predicting impending doom!
How can we avoid depression? We can get people to realize what they want from their government...they want less taxes, they want less regulation, they want less spending, they want the aggresive wars to stop.
If people start demanding this...very clearly and loudly...we can avoid sinking into depression and furthermore...we can avoid ever getting to this point again!
This is why many of us are fighting. We feel this is our last chance to rally our country and remember why we grew into this great place. We did it through freedom...this is the land of opporitunity.
Please...engage people not with predictions of depression...but the message is that freedom will keep us from depression, and freedom will come if America demands it in a clear voice. For instance, ask someone if tomorrow, government were to spend what it did in 1998...but every person would stop their income tax withholdings immediately...would our country be hurt or helped by this?
The numbers of this...
1998 federal budget, 1.7 trillion
2008 federal budget, 2.90 trillion
The difference is 1.2 trillion dollars. We'll pay 1.25 trillion in income tax this year.
Please commit these numbers to memory. This tells of the great opporitunity we have to demand our rights back...and in the process we'll save our economy as well.
Well, at least, I like your positive thinking as long as it
does not become denial.
However, in my strong opinion, deflation is inevitable because I believe that deflation really is a symptom of aging of population that shows up in terms of the economy due mainly to the declining natural demand caused by aging. Therefore, unless you can alter the aging of population, you cannot stop deflation, in my opinion. And, in my opinion, this is the real reason behind the motivation to create NAU to integrate a young Mexican population. And, in my opinion, depression is inevitable with deflation as long as we have a debt based money system because the debt based money system would collapse without a constant expansion of the economy that is impossible when deflation happens or when the dominant segment of the population is retiring, in my opinion.
However, I tend to agree with you that depression is not inevitable, but only if we get rid of the debt based money system and replace it with a new system that does not require a constant expansion of the economy to function, in my opinion. I also agree with you that the Income tax must go.
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." Benjamin Franklin
---
Getting rid of the debt based money system
This is not required to save us from collapsing.
This system itself is not causing the danger of falling apart economically. It's important, and would be much better if we could instill a system of honest money, but we don't need to do this in short order to save us from the abyss.
What we really need to do is start dramatically shrinking the size, scope, and power of the federal government. We have to withdraw from the world empire we've set up, and we've got to quit making promises that we can't keep. These are the things that are pushing us to collapse.
Want to save the American economy? All it would take would be the elimination of 1.25 trillion dollars worth of federal programs (trust me, we won't miss them) and thus eliminate the income tax. The country would immediately get a substantial raise and the economy would recover instantly.
Educate yourself an others on methods for honest money...but realize that is step 10 and we are on step 1.
Sure, your setp 1 is likely to delay
the inevitable collapse of the debt money system, in my opinion. I tend to agree that it's a good step to take, but it would only delay the inevitable.
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." Benjamin Franklin
---
No Response, jzneff ???
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." Benjamin Franklin
---
you miss the whole
you miss the whole picture......
as for me and my home, we shall worship the LORD
Tick tick tick
Well Fortis...only 14 days left in July, and you're still 5999 banks away from your prediction being true.
I would be very surprised if we have 10 total banks go under in July, I would say 2-3 more at most.
Check this
http://youtube.com/watch?...
1/2 way there Fortis
It's halfway through July and we've had 1 bank collapse.
Only 5999 banks to go before Fortis is proven right.
They were wrong last summer, they are wrong this summer. A few may fall, but nothing that will amount to a collapse of our financial markets.
Sorry Fortis, blame your losses on your inability to read markets. Don't buy high and sell low...it's a market fundamental.
If I was a Fortis customer,
If I was a Fortis customer, I'd seriously consider moving my money out of their incapable hands.
No Hoax
The german Financial Times has reported on that too:
http://www.ftd.de/unterne...
It does not talk about the 6.000 banks but quotes Maurice Lippens from Fortis as saying:
"Die USA laufen auf eine totale Kernschmelze zu."
which I translate as (I`m german, but not perfect in English):
"The USA are headed into a complete meltdown"
--------------------------------------
europe4ronpaul.blogspot.com
Hasta la libertad, siempre ;-)
reply
Dr. Paul has just stated that "something big is going on" in the financial sectors and less than 24 hours later the move to slander his expert opinion is already in full swing. The mainstream media cannot keep the lid on it any longer all the indicators are there in black and white, we are in a deep recession right now and will be in an all out depression if things keep moving in the direction they are. That is exactly what the good doctor was saying, it's looking worse than he thought it would and a depression is probably imminent.
Looks like a Hoax
http://www.opednews.com/a...
I have a friend from Belgium.
I sent the link to allegedly the original article to him and he said that it is a reputable paper and the English translation was basically correct, but of course, that was just his opinion.
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters."
Benjamin Franklin
Deficit Spending...
2004 - ($567 Billion)
2005 - ($493 Billion)
2006 - ($434 Billion)
2007 - ($600 Billion)
Throw in the Mandrake Mechanism and you get:
2004 - ($567 Billion) x 9 = $5.1 Trillion
2005 - ($493 Billion) x 9 = $4.4 Trillion
2006 - ($434 Billion) x 9 = $3.9 Trillion
2007 - ($600 Billion) x 9 = $5.4 Trillion
**“The man who does not read good books has no advantage over the man who cannot read them.” ~ Mark Twain **
That's bad economics
You don't apply the Mandrake Mechanism to deficit spending...you apply it to monetary creation.
The factor multiplier is money that's sent to banks and is due to fractional reserve.
This is a misapplication.
Where do you suppose that Governmental Deficit Spending
ends up, in the Ether somewhere? Get real...whether it originally is printed on a check and sent to GE, General Dynamics, The City of Baltimore, The State of Maryland, the country of Israel or to Muriel Fiitzenpotzen lately of Dubuque, it all ends up in banks as "additional reserve" available for your "monetary creation". Bad economics my ass!...misapplication?...your "correct" economic assumption amounts to a "non-application"!
**“The man who does not read good books has no advantage over the man who cannot read them.” ~ Mark Twain **
You assume
You assume they print the majority of the deficit...not true, we actually borrow the majority.
You're also assuming that banks get and keep this money...it's recirculated, because yeah, it's deposited into banks, then withdrawn, and spent, redeposited, withdrawn, spent.
Maybe some of it is extended by fractional reserve...but any decent economist would call foul on applying Mandrake to deficit spending.
THE DAY AFTER
I think that the collapse that many people are predicting will come sometime in the future, and I think that the economy will be quite different then. In other words, many things that exist today may not exist and I think that inflation is one of them. I guess what I see as the collapse is the reversal of the trend that started in 1913. I guess what I see as the collapse is the collapse of the debt based money system, in which virtually everyone is no longer able to borrow to create money out of his promis to repay. I guess what I see as the collapse is the collapse of the money supply bubble.
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters."
Benjamin Franklin
The Dollar
This is a response to the post below by jzneff entitled "Greater Fools".
You said:
The value of the dollar has changed dramatically since last year. I ran a comparison of the dollar to the Euro using this tool. On July 2, 2007, one US dollar would purchase .733837 Euros. Today, July 1, 2007, that same US dollar can only purchase .633794 Euros. That is a decline of almost 14%!!! Against the Japanese Yen, there has been a 15.6% decline. Against the Swiss Franc, it is a 16% decline.
That is what we call inflation.
This means that at best, the "real" price of oil would fall to $85.50 (accounting for 14% inflation in the last year).
There are several problems with that idea, however.
First, inflation is only likely to continue to get worse -- at least until we catch up with the government loans that have occurred since last year. Remember that we don't feel inflation from 6 to 18 months after the new money is introduced. We are just now going to be feeling the effects of the Iraq War Surge and the government rebate checks (these will probably relatively soon as they were given directly to the American taxpayer and therefore the public money supply is impacted that much sooner).
This does not take into account increased government spending. According to the US Treasury we had a deficit of at least $148 billion dollars at this point year to date. This year, we are already over $319 billion in deficit. That is a 115% increase in government deficit spending over last year -- up to this point! It could actually get worse as we go. This money has to come from somewhere, and the answer to that is inflation. This is an inflation wave that is coming on the horizon. We will feel its effects come this fall.
This doesn't even take into account if other countries lose faith in the dollar.
Second, there is more unrest in the Middle East than there was a year ago. While you seem confident that nothing is going to happen, no one can predict with any accuracy what exactly will happen in the next few months. One major terrorist attack could throw all theories out the window.
Third, there is the future danger of declining reserves which will naturally cause an increase in oil prices.
These numbers are truly abysmal, and this only counts the spending that we have on the books and inflation against other currencies that does not take into account an inflation they might have against real physical value.
You are making my arguments for me
1) What you said..."inflation is likely to get worse" is exactly why the price of oil has skyrocketed. People get panicky about future inflation, and thus dump their money into "inflation proof" commodities. We aren't dealing with inflation that's already here...we're dealing with implied future inflation.
2) I have faith that the Iranian situation will calm fairly soon. Israel is bluffing, and i'm certain of it...at least in the near term. The US is not about to take any action, and there's no urgency on Iran's part to push anyone any closer. This is a pissing contest, period.
3) Reserves aren't declining, and with a number of majors coming on line in the next 18 months, the capacity of oil producers is about to get a real shot in the arm. Pay attention to the IEA reports, rather than just read the headlines...they are quickly downgrading their estimates on demand, while the media spins it as something negative.
But there IS inflation
But you were predicting $70 oil, and I am saying that we will never get down to $70 again. Inflation, by the time this fall comes around, will have pushed the baseline price much higher. It is currently at $85.50, according to my calculations, and that is assuming zero speculation. The Peak Oil reached and inflation a very real threat, oil will continue to have upward pressure on its price.
That being said, if you are saying that we could see a pullback in the price of oil, I agree. It might even dip below $100 if everything lines up perfectly, but the trend will continue to be upward until government spending is curbed and proper fiscal and monetary policies are enforced. Even then, there will be upward pressure from increased demand and reduced supply, but that will be more manageable than what we have today.
I think we will
I'm not saying that we'll be sustaining prices around 70 per barrel for very long...far from it. It will likely bounce back from there...because the drop in price will cause another increase in usage, which will raise the price.
We are going to have a very volitaile market for quite a while...at least until 2010 when the market will find a happy medium because the discoveries from the year 2000+ are going to start coming on line.
They've been madly hunting for oil for 6-8 years now...we're about to see that oil in the next 2-3 years.