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Is $100 Barrel Oil Cheap?
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Sheriff
Admin
3807 posts
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 posted 1/18/2008 11:29:27 AM
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Here you go:
Casey Research’s chief economist, Bud Conrad, has confirmed with his own calculations that indeed this figure is a much more truthful estimate of where inflation actually is. Using shadow stats, Bud has calculated the oil price history using the 1980 CPI method. It turns out that 1980 barrel of $39.50 crude is the equivalent of over $200 per barrel in today’s anemic dollars.
http://beta.stockhouse.com/Columnists/2007/November/9/Is-$100-oil-cheap-
[Message edited by Sheriff on 1/18/2008 11:30:01 AM]
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Serega13
Moderator
1198 posts
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posted 1/18/2008 1:35:19 PM
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Compare historic price of gold and historic price of oil and you'll see that it's very closely connected. When oil was $27 a barrel you could buy as much gold with $27 as you can buy now with $90. So price of oil is not high, it's just that dollar is very low which is not suprising considering that real US inflation is around 10% and is certainly not what official statistics says it is.
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brad62
2373 posts
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posted 1/20/2008 6:15:29 AM
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No it's not cheap.
It wasn't cheap back then either.
You wouldn't know that the minimum wage was about a $1.65 an hour back then.
Gold, oil, diamonds, and housing, are hyper-inflated commodities.
If you look back in history?
An average house was 30,000 dollars.
But inflation was very high.
Armend Hammer made that deal with the Libyans that doubled the price of gas.
The Hunt brothers doubled the price of silver.
http://www.humanitas-international.org/showcase/chronography/biography/bios_h.htm
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Al_Bundy
450 posts
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posted 1/21/2008 2:16:00 AM
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It turns out that 1980 barrel of $39.50 crude is the equivalent of over $200 per barrel in today’s anemic dollars.
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Well... Are you ready to pay $5.94/gal?
Average fueling is $136.92 (full SUV's tank).
1979's average price $1.17/gal (normal)
Holly sheeet!
It's time to buy microvan or hybrid-engine.
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An average house was 30,000 dollars.
Accordint to oil's prices inflation 1980-2008 is 507% (200/39,5).
If average house's costed $30K, then now it counts for $152,1k. I think it's impossible to find a house in US for this price it's very low.
Do you think the invesments in real esate are more resonable if compare it with oil's ones. 
[Message edited by Al_Bundy on 1/21/2008 2:23:27 AM]
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Serega13
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1198 posts
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posted 1/21/2008 3:03:48 PM
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There are only 3 ways to invest your money: stock market, your own business and real estate. Real estate is the worst investment of the three, for various reasons. First you can't just sell the house if you live in it, you would need to buy another house which most likely appreciated just as much as your own house. Second, there's something called added value which real estate lacks completely.
If you buy a house and live in it for a few years, what makes you think that you can sell it for more? It's the same house you've bought, you've added no value to the house (even if you upgraded, you paid out of pocket for it so it doesn't count), but it's actually gotten older, therefore lost some value to the buyer. You can count on inflation appreciation, that's 4-6% a year and on speculators which have all but left the market in this economy.
If you take the same money and invest in stock market, buy Microsoft stock for example, all 80,000 Microsoft employees go to work everyday to add value to the company and to your investment. That's why you could have easily made 20% return by simply investing in stocks last year. Markets are down this year, but not the medical/pharmaceutical companies, some service and some military hardware, you can find good stocks in any economy.
Third option is the best one - invest in your own business, if you have one that is, this is by far the best investment you can make.
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Àêàêèé
2240 posts
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posted 1/21/2008 3:35:42 PM
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i don't think real estate is such a bad investment
when you buy stocks, you give your money to be wasted by some other people. and you can easily lose a lot. like now the stocks are fuked up and you have no control
but with real estate even the whole economy gets fuked, you'll still have something you can control and get some income from it if you want.
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Serega13
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1198 posts
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posted 1/22/2008 11:37:27 AM
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Akakii, if the whole economy gets fuñked the house values in US will hit rock bottom, imagine 3 million houses on sale and noone buying because they are losing value, pretty soon you will see 500k houses going for 150k. So in a bad economy it's better not to invest anything at all, with a possible exception of your own business if it happens to not be effected by bad economy.
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Àêàêèé
2240 posts
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posted 1/22/2008 4:17:02 PM
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Serega, of course the price may go down a lot. but it depends how to look at it. if you have 500K in cash or other investment it may go down in value much more than a 500K house. A house is always a house - something physical and always has significant value. But money may have some value or may not have any value. A house will never have Zero value, but money can easily lose all value.
maybe not perfect but pretty cool example. A lot of people got fuked by russian money reforms several times. they lost their savings. but many of those who kept their apartments (especially in moscow) are now millioneries.
Invest in your biz is great, but how can you make sure it wont be affected by fuked economy?
so you probly wanna do everything - a biz, a house, stock up pile of gas, food, vodka and chicks now you're well prepared to all kinds of disasters
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