Inflation is coming...in a big way. Part 2.

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rookiepilot
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Inflation is coming...in a big way. Part 2.

Post by rookiepilot »

Party....is just getting going. Guests are arriving, band is tuning up. drinks are flowing.

Part one was the shift from Capital to Labour. In progress.....seeing more labor disruption...lower participation....people retiring.......

Part two is all about oil / energy prices.

We (globally) are running out of cheap oil / energy Investors, like me, won't tolerate more drilling by oil / gas companies, with governments hostile to new supply.

OPEC has serious question marks, whether they even can supply more.

Energy transition, will take trillions of dollars...tens of trillions, and take a decade or more.

The Biden administration is absolutely panicked. They know. They can't encourage drilling, politically. They are selling oil from strategic reserves, and massively talking down future demand, using every excuse (Omicron). The EIA says demand in 2030 worldwide...will be BELOW 2019, pre covid. Liars.

Get ready for car gas $2.50 +.......and an epic sale on piston twins and the like. Gonna get fun.......
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Re: Inflation is coming...in a big way. Part 2.

Post by Aviatard »

So we’ll have the same gas prices as England? What do you suggest we do with this information?
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Re: Inflation is coming...in a big way. Part 2.

Post by rookiepilot »

Aviatard wrote: Mon Dec 27, 2021 9:33 am What do you suggest we do with this information?
Let's see. Laugh, fade me, or prepare. It's up to you.

Or perhaps thank me.

Anyway, It's free.
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digits_
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Re: Inflation is coming...in a big way. Part 2.

Post by digits_ »

Why would a change in energy source cost trillions?

If you need electricity, you can build nuclear power plants pretty much anywhere. It's a political decision to do or not do this.

If you are running out of oil, you can still access harder to reach oil for a higher cost. If taxes were to stay the same, you can almost spend double the cost on oil drilling vs now, to get the oil you need. Again, a political choice that can fairly quickly change. But if you don't need oil for electricity, and you need less for transportation (electric cars), the remaining oil consumption will put a negative pressure on the oil prices.
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Re: Inflation is coming...in a big way. Part 2.

Post by photofly »

Nuclear power plants use vast quantities of water and need stable geology. You can’t build them anywhere.
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Re: Inflation is coming...in a big way. Part 2.

Post by rookiepilot »

digits_ wrote: Mon Dec 27, 2021 10:24 am Why would a change in energy source cost trillions?
Vast rebuild of power infrastructure.
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Re: Inflation is coming...in a big way. Part 2.

Post by pelmet »

I think I will hold onto my big Suncor, Enbridge, Pembina, and small Imperial Oil shares. The dividends are addictive.

Maybe I should buy some more. How will AC do with sky high prices.

I going to buy a twin with my dividends and the avgas as well. It will give me comfort over the mountains and I can return some carbon to the air as a thank you. Might warm things up out west.
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Re: Inflation is coming...in a big way. Part 2.

Post by rookiepilot »

Inflation continues to accelerate hard.

Kyle Bass, a rather direct talking individual, believes true inflation is upwards of 15% annually in the US.

https://seekingalpha.com/news/3788088-h ... oil-prices

Barry Ritholtz and every advisor like him are blind fools, and worse — gaslighting the truth, to keep naive client money with their firm.

When this is done, they will be carrying people out in body bags.
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Re: Inflation is coming...in a big way. Part 2.

Post by photofly »

rookiepilot wrote: Mon Dec 27, 2021 9:19 am
Get ready for car gas $2.50 +.......and an epic sale on piston twins and the like. Gonna get fun.......
Ok - but can we get a timeframe for this prediction?
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Re: Inflation is coming...in a big way. Part 2.

Post by rookiepilot »

photofly wrote: Fri Jan 14, 2022 7:25 pm
rookiepilot wrote: Mon Dec 27, 2021 9:19 am
Get ready for car gas $2.50 +.......and an epic sale on piston twins and the like. Gonna get fun.......
Ok - but can we get a timeframe for this prediction?
I don’t know. No one knows the future down to the exact week it might happen. Do you?

I don’t need to know. But I am positioned, believe me.

When i see CB’s, I don’t need to know exactly when a storm will show up. Conditions are obvious.

And BTW I write what i want to write. Don’t agree, fade me. Make fun of me.

Lots of people are.

That is the best sign for me. The idiots who laugh.
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Re: Inflation is coming...in a big way. Part 2.

Post by photofly »

To be fair, when I see CB's, I know the storm has already arrived. The benefit of weather forecasting is that it comes with a timeframe: it will rain (or not) tomorrow.

I"m just wondering when you think car gas will hit $2.50. 2022? 2023? Beyond that?
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Re: Inflation is coming...in a big way. Part 2.

Post by goldeneagle »

photofly wrote: Fri Jan 14, 2022 8:24 pm I"m just wondering when you think car gas will hit $2.50. 2022? 2023? Beyond that?
I remember clearly, it was over 10 years ago, all the pundits were crying that gas was going up like crazy, it was going to hit 2.00 that year without a doubt. I had just bought a camper van and we filled up in chilliwack for 1.17, both wife and I said we would never put gas that cheap in it again, oh well. guess what, we never did put gas that expensive in it again. some time later, filling it up for well under a buck, we chuckled about that first trip.

A few years later, gas was once again on a tear. I remember well doing the math, we were choosing between purchasing a used corrola or a new smart car for her. We decided we wanted the space, so, I bought the used corrola. On the way home we filled it up for 1.49, again said 'probly never put gas in it this cheap again'. Well, we never put gas in it that expensive again, and only 6 weeks later I was filling it up at a pump that said 1.01, but we got 2 cents off from the cc, so filled for under a buck again.

I've been hearing threats of 2 dollar gas for a decade, the only time I've ever paid that much was filling a rental car in Europe.

Prices do go up, and it's inevitable gas will eventually hit 2 bucks. But it does go up and down like a yo-yo too, so it would not surprise me, when we see 2 bucks at the pump one day, within a few weeks after that, we'll see a buck and a half again.

But those who think the price of gas is somehow tied to overall inflation are delusional. The price of oil will be whatever the Saudi princes say it will be. Ever heard of OPEC ? Those meetings are where they decide how they intend to manipulate the price of oil going forward, and they will grind it up to as much as they can get away with.
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Re: Inflation is coming...in a big way. Part 2.

Post by Arnie Pye »

photofly wrote: Mon Dec 27, 2021 10:41 am Nuclear power plants use vast quantities of water and need stable geology. You can’t build them anywhere.
Too bad we don't have 20% of all the world's water within our borders. Shame about all those earthquakes we get outside of BC.
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Re: Inflation is coming...in a big way. Part 2.

Post by mijbil »

rookiepilot wrote: Fri Jan 14, 2022 7:04 pm Inflation continues to accelerate hard.

Kyle Bass, a rather direct talking individual, believes true inflation is upwards of 15% annually in the US.

https://seekingalpha.com/news/3788088-h ... oil-prices

Barry Ritholtz and every advisor like him are blind fools, and worse — gaslighting the truth, to keep naive client money with their firm.

When this is done, they will be carrying people out in body bags.
His number is bang on IMO. One example: With the great shutdown some of us had more time for yard work than normal. I bought a few yards of bark mulch and bedding sand in spring 2020 at the local place and made a note of the volume for future reference. I also noted the price. Come spring 2021 I went to the note to see how much I needed and noted the new price. Up 15%. The CPI is in many ways a big fat lie since it strips out food and fuel. I mean who eats or drives a car? Right? Added back in, the number is higher. One other anecdote. The local nuts and bolts place where I go for stainless screws and fittings has a sign taped to the door. "Please ask the clerk for current prices. Prices not as marked. Prices are up 30 to 300%" And Blackface the surfing fool of Tofino would have us believe it's only 4.1%.
My house assessment jumped 32% from last year. I did nothing to it, well other than the yard work.
Fun times ahead. As far as oil rising, I believe it. One of the biggest secrets in the world is the proven reserves of Saudi Arabia. How much DO they really have left in the ground? Have we reached peak oil yet? It's hard to say as drilling tech gets better, but having a hostile government like that of Blackface or even Joe "Xiden" doesn't help.
The green thing like electric cars is nice and all, but it's window dressing compared to the total energy budget of the planet.
https://en.wikipedia.org/wiki/World_ene ... onsumption
https://yearbook.enerdata.net/total-ene ... stics.html
Ask the Germans how "green" energy is working out. Windmills help out, but I note that they have quietly turned back to conventional carbon energy sources.
4th chart shows a return to coal.
https://www.cleanenergywire.org/factshe ... mix-charts
Electric vehicles are great. I don't own one (yet) but friends and relatives do. The acceleration of a Tesla is insane. In fact it's called "insane" mode. A rich relative owns one of those bad boys. The current catch is though that from what I have read, we don't have the grid capacity to handle the electric energy draw if we suddenly went electric as far as possible. Here's but one read on that https://notalotofpeopleknowthat.wordpre ... -capacity/
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Re: Inflation is coming...in a big way. Part 2.

Post by photofly »

Arnie Pye wrote: Fri Jan 14, 2022 9:19 pm
photofly wrote: Mon Dec 27, 2021 10:41 am Nuclear power plants use vast quantities of water and need stable geology. You can’t build them anywhere.
Too bad we don't have 20% of all the world's water within our borders. Shame about all those earthquakes we get outside of BC.
Unfortunately, most of that water is so far from where the power is actually needed that it’s pointless building nuclear plants there.
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Re: Inflation is coming...in a big way. Part 2.

Post by PeterParker »

Arnie Pye wrote: Fri Jan 14, 2022 9:19 pm
photofly wrote: Mon Dec 27, 2021 10:41 am Nuclear power plants use vast quantities of water and need stable geology. You can’t build them anywhere.
Too bad we don't have 20% of all the world's water within our borders. Shame about all those earthquakes we get outside of BC.
Nuclear power plants tend to need heavy water and hence usually found near the ocean/sea. Not quite able to use fresh water IIRC.

mijbil wrote: Fri Jan 14, 2022 10:11 pm
Ask the Germans how "green" energy is working out. Windmills help out, but I note that they have quietly turned back to conventional carbon energy sources.
4th chart shows a return to coal.
https://www.cleanenergywire.org/factshe ... mix-charts
Electric vehicles are great. I don't own one (yet) but friends and relatives do. The acceleration of a Tesla is insane. In fact it's called "insane" mode. A rich relative owns one of those bad boys. The current catch is though that from what I have read, we don't have the grid capacity to handle the electric energy draw if we suddenly went electric as far as possible. Here's but one read on that https://notalotofpeopleknowthat.wordpre ... -capacity/
This might have something to do with the sudden shutdowns of all their nuclear power plants after the Fukushima disaster and not from a lack of renewable power.
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Re: Inflation is coming...in a big way. Part 2.

Post by rookiepilot »

mijbil wrote: Fri Jan 14, 2022 10:11 pm

Fun times ahead. As far as oil rising, I believe it. One of the biggest secrets in the world is the proven reserves of Saudi Arabia. How much DO they really have left in the ground? Have we reached peak oil yet? It's hard to say as drilling tech gets better, but having a hostile government like that of Blackface or even Joe "Xiden" doesn't help.
The green thing like electric cars is nice and all, but it's window dressing compared to the total energy budget of the planet.
https://en.wikipedia.org/wiki/World_ene ... onsumption
https://yearbook.enerdata.net/total-ene ... stics.html
Ask the Germans how "green" energy is working out. Windmills help out, but I note that they have quietly turned back to conventional carbon energy sources.
4th chart shows a return to coal.
https://www.cleanenergywire.org/factshe ... mix-charts
Electric vehicles are great. I don't own one (yet) but friends and relatives do. The acceleration of a Tesla is insane. In fact it's called "insane" mode. A rich relative owns one of those bad boys. The current catch is though that from what I have read, we don't have the grid capacity to handle the electric energy draw if we suddenly went electric as far as possible. Here's but one read on that https://notalotofpeopleknowthat.wordpre ... -capacity/
Shhhh, don’t tell everyone. And bang on comments.
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Last edited by rookiepilot on Sat Jan 15, 2022 7:56 am, edited 1 time in total.
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Re: Inflation is coming...in a big way. Part 2.

Post by rookiepilot »

goldeneagle wrote: Fri Jan 14, 2022 9:06 pm
But those who think the price of gas is somehow tied to overall inflation are delusional.

The price of oil will be whatever the Saudi princes say it will be. Ever heard of OPEC ? Those meetings are where they decide how they intend to manipulate the price of oil going forward, and they will grind it up to as much as they can get away with.
This take is so bad I have no idea where to begin.

You have a degree? Get your money back. Wow.
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Re: Inflation is coming...in a big way. Part 2.

Post by rookiepilot »

photofly wrote: Fri Jan 14, 2022 8:24 pm To be fair, when I see CB's, I know the storm has already arrived. The benefit of weather forecasting is that it comes with a timeframe: it will rain (or not) tomorrow.

I"m just wondering when you think car gas will hit $2.50. 2022? 2023? Beyond that?
Maybe takes a while, if Central Banks get serious about crushing inflation. They have a lot to say about it.

Maybe Canada cuts gas taxes. Who knows? Everything is “all else equal”, but that never is the case.

But then Piston Twins, and a whole lot of other beloved assets, are going way down in price.

Never mind a likely recession.
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Re: Inflation is coming...in a big way. Part 2.

Post by pelmet »

rookiepilot wrote: Sat Jan 15, 2022 8:07 am
photofly wrote: Fri Jan 14, 2022 8:24 pm To be fair, when I see CB's, I know the storm has already arrived. The benefit of weather forecasting is that it comes with a timeframe: it will rain (or not) tomorrow.

I"m just wondering when you think car gas will hit $2.50. 2022? 2023? Beyond that?
Maybe takes a while, if Central Banks get serious about crushing inflation. They have a lot to say about it.
Wouldn't surprise me if they are playing a game of letting inflation run for a while to assist with the debt. The average person has their equivalent of taxes increased and don't realize it.
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