With the price of oil plummeting nearly $100 a barrel since July, people have something to feel good about during this difficult economic time period; however, it may lead to the dismissal of the peak oil theory. For those not familiar with peak oil, it is the point in time when the maximum rate of global petroleum extraction is reached. After this point in time, the rate of production begins to steadily decline.

With the relatively cheap oil prices, the cost of bringing new oil into production is too expensive. As the International Energy Agency (IEA) has repeatedly warned for more than a year, excessively low prices will discourage investment in production, especially with the steadily rising costs of extracting and processing oil from increasingly difficult places. This lack of sufficient investment has serious consequences for the future supply once the global economy recovers from its current

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We are in a transition between the old profligate energy economy and the new economy of relative scarcity, says James Howard Kunstler. He is not convinced the President-elect Obama is fully aware of the dramatic changes that lie ahead for America. Even if he were, says James, he’d probably be crucified for daring to talk about it.

This from Whisky & Gunpowder:

A lot of readers are twanging on me for refraining to castigate President-elect Obama for deeds yet undone. They’re discouraged by the advisors and cabinet secretaries he’s picked, ostensibly because the crew coming in are Washington “insiders,” meaning they can’t possibly see or do things differently.

My own starting point for this is the belief that in the years just ahead any sociopolitical entity organized at the giant scale will flounder — this includes everything from the federal government to global corporations to factory farms to centralized

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In the energy market Wednesday, oil not only stayed below the $60 benchmark, it swooned further, with crude for December delivery closing at $56.16/barrel, down $3.17. December reformulated gasoline lost 5.8 cents, to $1.2481/gallon.

OPEC may now be panicking. Its President, Chakib Khelil, told Reuters that the cartel may cut oil supplies again by the end of this month. OPEC’s next scheduled meeting isn’t until Dec. 17 in Algeria, but it could take action ahead of that — as early as Nov. 29 — if prices fall further from current levels, Khelil said.

The Energy Information Administration trimmed its outlook for energy demand and prices in it monthly report issued yesterday, blaming the current U.S. and global economic downturn.

The EIA expects world oil demand to rise almost 100,000 barrels per day in 2008 but to remain “virtually flat” in 2009. In the US, it expects petroleum-product demand to drop 5.4%,

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If you subscribe to one of my premium services, you'll have noticed that we've added a bullish gold position or two lately. Let's look at a daily chart of gold to see why.You can see that gold is still channeling lower, but has touched the bottom of its recent downtrend. When it has done this in the past, it usually goes higher for quite some time.At the same time, we are getting a buy signal from the MACD indicator on the bottom -- another indicator of the shift in short-term trend. And gold is now above its 10-day moving average. This usually indicates higher prices ahead.However, I still haven't given buyers of my recent gold report the "all clear" to buy gold and silver positions. That's because the weekly indicator I told you about in that report has still not given a ...

With events changing daily ... with the government takeover of Fannie and Freddie ... with important news coming out almost hourly — I'm sure you're often wondering: "What does Larry think here? How do I make money in these crazy markets and economic environment?" Indeed, I'm receiving more questions about the markets ... more doubts about the commodities bull market ... more inquiries about inflation versus deflation, than I have in years. That's not surprising, considering the extreme, wild swings in the markets. Emotions are running deep. Confusion is everywhere. Even the most experienced investors and traders are having quite a spell with the current economic and market environment. So I'm going to convey as many of my views as possible in this report ... and the reasons behind them. That way ...

There is nothing like a good dose of humor to cheer one up from the otherwise depressing economic situation. The honors go to Norgate Investor Services who compiled the amusing Devil’s Dictionary for Financial Markets. The title was borrowed from Ambrose Bierce’s The Devil’s Dictionary – a great work of diabolical appetites published in 1906.

Enjoy the A to Z of satirical investment definitions.

Analyst recommendations: Strong Buy – Buy Buy – Hold Hold – Sell Sell – It’s too late

Arbitrageurs: large traders who feed on plankton.

Averaging down: lowering the average price of

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by Edward Hugh: BarcelonaWhat follows is the first of three posts which will appear this week on the "peak retail sales" phenomenon - one on them will look at Italy, another will look at Germany, and the third will examine the Hungarian case. The basic idea is that as populations age and decline, it is only natural that we should anticipate a longer term decline in the volume of retail sales in the most affected societies. Many theorists place the impact of population ageing out at some distant point in the future, often people seem to like to use 2050 as a reference point, or possibly 2020. But the fact of the matter is that we seem to be able to identify significant consequences flowing from population ageing already, in levels of housing activity to give one example, and in retail sales, to mention another. ...

Energy and Capital
“Is the world suddenly losing its appetite for oil and natural gas? No, demand is still higher than ever before. Although the rate of growth is slowing somewhat due to record prices, demand in Asia and the Middle East is still red-hot and will continue to outweigh declining demand in the US and Europe…So what’s the deal?

The recovery of the dollar, however illusory, is the main factor taking down the price of gold, oil and other commodities. As I have said here more than once, the daily news about oil inventories, demand levels, even pipeline attacks isn’t nearly as important as the valuation of the dollar. (And no, it’s still not because of the evil speculators.)…

The reason is simply that when traders have lost confidence in the stock market, they fly to the safety of commodities, energy and gold. When confidence returns, they fly right …

I’ve been pounding the table about an energy crisis for quite some time. As a loyal reader of my Money and Markets column, you might think I’ve been proven right by gasoline soaring over $4 a gallon in 32 states and oil hitting new record highs.

But most of what I’ve been talking about is simply the long-term supply/demand squeeze that will transform our oil-addicted civilization in the future.

It appears, however, that the future is happening now. My fundamental and technical indicators are ALL sounding alarm bells.

Today, I’m going to give you an uncensored, no-holds-barred look at the consequences of the energy crisis. First, let’s talk about why Peak Oil poses such an extreme economic …

Man, I've been busy with my new oil report. I just had some time today to kick back and read some stories. Check out this first one ... Investment Bank Fortis Expects Complete Breakdown of the American Financial Markets Within Days or Weeks RUSSEL/AMSTERDAM (DFT) - Fortis expects a complete breakdown of the American financial markets within days or weeks. This explains, according to the bank insurer, the series of interventions on Thursday with the aim of strengthening themselves by € 8 billion. "We are ready at the last moment. The U.S. is doing much worse than we had thought,” said Fortis chairman Maurice Lippens, who insists that CEO Votron shall not be replaced. Fortis expects bankruptcies of 6,000 U.S. banks that have low coverage. "But the same goes also for Citigroup and General Motors, and thereby starts a complete meltdown in the U.S.” In a side note, you can purchase Treasuries direct from the US government, and that ...