Can we also agree that everyone in the CFTC who said that higher oil prices was due to supply and demand needs to be fired and return their paychecks to taxpayers. What the hell were these people doing? Making FEMA look good?

As far as the future goes, one thing that peak oil nuts did not get is that the places where oil is easiest to obtain are hamstrung politically. Venezuela and Iran are not going to have spare oil capacity because they are afraid they are going to be taken over in a coup. The Venezuelan tar sands are not like the ones in Canada. You can drill a hole in them and the oil comes out flowing at 2000 barrels per day. Because Chavez is behind the eight ball with debt payments, he is going to auction off huge chunks of said tar sands to the highest bidder. Ecuador, whose main export is oil, is already defaulting on their debt.

Iraq is on schedule to increase production to six million bpd, which is a 3 million bpd increase. Saudi Arabia is bringing on another 1.2 million bpd filed within the year, and there are places in Iran where you can kick the ground and oil comes up. Yes, more oil will be coming from OPEC than the developed world, but there are not going to be any shortages. We are already awash in oil.

But of all the challenges facing the country, imported oil is IMO a bigger economic threat to the U.S. than any other. We need to increase gas taxes and plow the money into alternative energy. We cannot afford to just slip back to the way we were going.

And precisely what is interchangeable with oil?

I plan to buy gold and oil at some point in the next six months or so.

This little downdraft is the reciprocal of the recent commodity boom. It will pass sooner than you think.

To clarify: I was referring to stocks, not commodities, with respect to what will rise sooner than you think. Commodities will remain a fungible consumable and remain low in price. Any bull runs in commodities will turn to cow chips.

Now, how about all those with big brains who proclaimed commodities an ‘asset class’ as opposed to a consumable? Gold marches to it’s own drummer. The rest of the commodities world for a living. Treating commodities as an asset class is equivalent to treating retail store clerks as an asset class. Without a union, they are interchangeable and expendable. Commodities are made to be used. Astute price fixers may try to use runaway credit to corner the market, but it didn’t work for the Hunt brothers and it still doesn’t work.

I’m sure there are still a few true believers who believe The Theory of Boone and it’s sickly step brother, The Theory Of Demand Destruction. A few probably hold Nobel prizes. Ha Ha Ha. (I’m righter than them.)

Well, here’s the follow up. Stocks will be the next place to put your money, even though it doesn’t look that way now. The market and the economy will take on the appearance of the New Era market of the later 1990’s. Startups will be common again, and probably of more substance. Regulators will build safeguards into the credit markets that prevent commodity bubbles. This will prevent, or at least delay, stupid people from, once again, hitting their heads against the wall just to see if it still hurts.

This little downdraft is the reciprocal of the recent commodity boom. It will pass sooner than you think.