Just when I thought I had completely lost my sense of humor, I ran across a
MoneyNews.com article titled "Lehman Bros Report: Oil Bust in the Cards".
Hahahaha! Thanks, Lehman!! Hahaha! I needed the laugh!
Perhaps part of the humor is that this comes at the same time as the price of
gasoline went up 3 cents to another record high of an average of US$3.70 a
gallon. This is up 22% from this time last year! Hahahaha!
It gets even funnier when Lehman is not just predicting lower
prices, but "Lehman is now predicting prices at $83 a barrel in 2009 and as low
as $70 in 2010." At this point I am laughing so hard that my stomach hurts, and
since I am on the verge of pooping in my pants, I am desperately trying to stop
laughing by sticking my own thumb in my eye, but it does no good! I just keep
going, "Hahahaha! Oww! Hahahaha! Oww!"
But $70 a barrel of oil? Hahahaha! Oww! Hell, the cost of production is higher
than that! So does Lehman think that production costs are going to go down?
Hahahaha! Oww!
Bill Bonner here at The Daily Reckoning, taking no notice of my anguish or my
thumb, says, "Ten years ago, China imported 165 million barrels of oil per
year. Today, the total is more than 1 billion. Wonder why the price of oil hit
a new high last week - above $126 a barrel? Well, China is a big part of the
answer." A whopping 600% increase in 10 years, and yet Lehman thinks that oil
will go down in price? As prices kept going higher to $127.82! Hahahaha! Oww!
Kevin Kerr at Whiskey and Gunpowder says, "According to the most recent data
from the US Energy Information Administration, oil demand for countries in the
Organization for Economic Cooperation and Development - which includes
developed nations like Japan, Germany and the United States - has gone up 14%
since 1980. Oil demand for the rest of the world, however, has skyrocketed 43%.
That's more than three times as fast!"
And yet Lehman thinks that the price of oil will go down? Hahahaha! Owww!
So, handily summing up, you can take it from me, the Loudmouth Mogambo
Prognosticator (LMP), the guy with the ready laugh and the sore eye where
somebody keeps sticking his thumb in it, when I tell you that there is no way,
absolutely no way, absolutely no freaking way in hell that oil will be that low
next week, next month, next year or ever! Hahahaha! Oww!
I was going to go to the medicine cabinet to find something that would stop my
eye from mysteriously hurting, when it fell on Sean Brodrick at
MoneyandMarkets.com writing, "According to the International Energy Agency,
China's overall oil demand rose by 7.8% in February from a year earlier, much
higher than earlier estimates of a 5.3% gain. And gasoline demand rose by
22.8%!"
Careful Mogambo Scholars will take particular note of the use of Mr Brodrick's
use of exclamation points in highlighting the rise in gasoline demand, as this
means to me a rise in the use of internal combustion engines, meaning that a
lot of work is being done, which means that a lot of raw materials are being
consumed.
In fact, he reports, "As a result of that surge in demand, China's crude oil
imports rose 15% in the first quarter and 25% in March. Its imports are rapidly
accelerating!" Again one notes the use of the exclamation point!
And in another very populous country, India, he says that "oil product sales -
a proxy of demand - surged by 10.9% in February compared to a year earlier."
Yow! 11% in one year!
The interesting part, which is a euphemism for, "the price of oil is going to
go through the freaking roof one of these days real soon, and for a long time
after that, too, and if you want to make a lot of money, then get your
worthless butt in gear and go out and buy things connected with oil" is that
this gigantic surge in demand is coming at a time when supply is shrinking.
This is made manifest when Mr Brodrick reports that "oil production is already
shrinking in 60 of the world's 98 oil producing countries. So it's no surprise
that in March, global oil supply fell by 100,000 barrels per day, led by lower
supplies last month from OPEC, the North Sea and non-OPEC Africa."
And Kevin Kerr agrees, too. "Unfortunately," he writes, "There's no way for
supply to keep up." As in "no way, absolutely no way, absolutely no freaking
way in hell, just as The Mogambo put it in a previous paragraph", which he
could have said but didn't.
This is important stuff, so I call up the local paper and tell them that I want
one of their stupid little reporters to come over for my news conference so
that I can tell the world what is happening. The little receptionist asks, "Is
this The Mogambo?" and I proudly say, "Yes, it is!" Then, suddenly, the line
goes dead! So I call back, and the same little receptionist asks, "Is this The
Mogambo?" and I proudly say "no!"
Then she says, "Is this about inflation?", and I say, yes, it will impact
inflation, and before I can say another word, she says, "It's you, you Stinking
Mogambo Idiot (SMI)!", and hangs up again!
So, if you never read in your newspaper how inflation is going to kill all of
us, especially inflation in the price of energy, then blame the stupid little
receptionist.
The inflation you can blame on the corrupt Federal Reserve, and the corrupt
Congress (except Ron Paul), which encouraged them, and the corrupt Supreme
Court, which let them continually ignore the part of the constitution that
requires that money be only of silver and gold.
The Mogambo sez: Being as sweet and brief as I can manage, under the
circumstances, if you aren't buying gold and silver, you are a moron.
Richard Daughty is general partner and COO for Smith Consultant Group,
serving the financial and medical communities, and the editor of The Mogambo
Guru economic newsletter - an avocational exercise to heap disrespect on those
who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2008, The Daily Reckoning.)
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Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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