Saturday, May 28, 2011

Very Interesting Jim Rogers Interview

I have to say that there is one thing to measure commodities against...and that thing is the exponential bell curve. The reality is that a society in decline, decline often triggered by a peaks in the availablility of and demand for resources, tends to accellerate its contraction of demand in many ways. One of the ways that the bell curve resolves issues for us is though events that seem not to be associated with the issue. For example, excessive demand for oil that has now passed the peak of the bell curve will likely be resolved both with new technologies that do not require oil and smaller populations that will use less of it. The fact is that nature is brutal in its pursuit of balance and the reality is that Oil is in less demand now that the markets are taking into account.

Even the CEO of Exxon stated that given the end user demand he sees, prices of oil are over valued and should be in the 40 to 60 dollar area...and he's an oil pumper. Remapping of supply and demand in the context of imbalances in the credit system caused by money printing and malinvestment is torturous and likely to result in contraction on many other assets and commodities. That is what massive credit contractions tend to look like. Therefore, though I find this interview to be very interesting, I disagree with the premise that the other side of the bell curve has to be accompanied by higher prices.

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