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Page added on April 4, 2016
$120 Oil As Soon As 2018?
Today, I’m going to try and tackle the reasoning for my ‘wild’ predictions for oil reaching triple digits by the end of 2017. While I am nearly alone in these forecasts, they are not just pulled out of space, but with deep regard for the fundamental supply/demand picture that everyone mostly agrees upon, combined with what I think is a deeper insight into the likely trajectory of oil company leverage, financing and the role of financial oil derivatives.
Despite the technical nature of this discussion, I think I can make a strong case for $120 oil in 2018 using only two charts of my own making – one charting global demand, which is more universally agreed upon, and then an overlay of global production, which is more open to prediction.
First, demand: Almost all analysts including the EIA and IEA agree that demand continues to grow at a steady pace throughout the rest of the decade, and even a minor economic downturn will only slow the pace of growth (green line), but not upend the upward trend line of demand. Sorry to those environmentalists who pray for an end to carbon use growth in the next decade – virtually no one currently believes it will happen.
(Click to enlarge)
Now, let’s overlay the rudimentary global production line(s) on top, put some likely dates on this chart and describe some of the possible scenarios:
(Click to enlarge)
First, we notice that the blue line of production going back before the oil crash is steeper than the demand line – hence the current gluts we are experiencing and low barrel prices. Low prices have made production growth begin to slacken, which I’ve indicated by easing the slope of the light blue line. It’s clear that if nothing else happened from here, we’d still see future production outstrip demand – hence some analysts’ fear of never seeing triple digit oil prices, or at least a much lower for much longer scenario.
But most analysts agree that the sharp drop in Capex budgets, not just among shale producers, will have its effect on sharply lowering production this year and putting growth in reverse, efficiencies and well cost reductions notwithstanding. What’s critical to note is how the media, and surprisingly most analysts, see global oil merely through the prism of U.S. independent shale players. To me, this is the critical grave mistake they make. Recent lease outcomes in the Gulf of Mexico, problems in Brazil and the likely end of spending for all new Russian oil projects are just a few of the other gargantuan gaps in global production we’re likely to see after 2016.
I’ve drawn two lines in black on production; one that most of the analysts including the EIA are making in how they see this production curve playing out, and mine – how I see it likely playing out.
While the EIA and most other analysts agree that sharp capex drops will begin to have their halting effects on oil production, they tend to argue over when those production drops come and how steep they will be. In all cases, they argue that any drop in production will be answered by a rally in oil prices, to the degree that U.S. shale players again ‘turn on the spigots’ and reestablish the gluts that have kept us under $50 a barrel for most of the last year. In this scenario, production never – or at least exceedingly slowly – rebalances to match demand.
I see it much differently. I could argue that the shale players, even with their low well drilling costs and backlog of ‘drilled but uncompleted wells’ (DUCs) cannot in any way repeat their frantic production increases they achieved from 2012-2014 ever again. I believe this because of financing constraints and the lack of quality acreage among other reasons – but I don’t have to even “win” this predictive argument.
Related: Why We Could See An Oil Price Shock In 2016
Longer-term projects from virtually all other conventional and non-conventional sources that have not been funded for the past two years will see their results, in that there won’t be the oil from them that was planned upon. Chevron estimated in 2013 that oil companies would have to spend a minimum of $7-10 trillion dollars to 2030 to merely keep up with demand growth and the natural decline of current wells. And this was without factoring in the drop in exploration spending that is occurring now and throughout the next two years. Severe capex cuts from virtually every oil company and state-run producer over the last two years has put this necessary spending budget way behind schedule.
You can see why I tend to have a much more radical view of the decline line in production beginning in late 2016 and lasting, in my view, at least until the middle of 2018, when production again only begins to get the funding (and time) it needs to try and “catch up”.
Meanwhile, there will be, as I see it, a violent crossing of the demand and supply lines in my graph – and an equally violent move in the price of oil because of it.
Finally, when this trajectory becomes obvious, the financial markets will waste no time taking full advantage of it – with a massive influx of speculative money, driving up prices even more quickly and steeply.
I’ve seen that before – and am currently alone in believing how close we are in seeing it again.
39 Comments on "$120 Oil As Soon As 2018?"
makati1 on Mon, 4th Apr 2016 7:42 pm
Did I miss the discussion about the contracting economy and the inability of the system to support triple digit oil prices? No?
Well, it is apparently just another bullshit piece to prop up the oily business and sucker in a few more “investors”.
But, bring on $120 oil and watch the collapse. The final one.
Plantagenet on Mon, 4th Apr 2016 8:18 pm
The discussion is on the right track. Yes, we are in an oil glut now. Yes, demand for is slowly growing.
The big unknown is what will happen to oil production going forward. But while we can’t make this prediction precisely, nonetheless at some point the oil glut will end and oil prices will start back up and eventually a jump to $100+ per barrel will happen again.
CHEERS!.
makati1 on Mon, 4th Apr 2016 8:45 pm
Here is some support for my assertion:
“We are already seeing lots of things happen that never take place outside of a recession, and the U.S. economy has already been sliding downhill fairly rapidly over the past several months.”
http://theeconomiccollapseblog.com/archives/19-facts-that-prove-things-in-america-are-worse-than-they-were-six-months-ago
Actually, the Us is in a depression, but the fudge job the government does on its numbers make it look rosy. 47 million in the soup lines says otherwise.
Plantagenet on Mon, 4th Apr 2016 8:48 pm
You may be right that the US is in a depression, but the official BLS numbers just don’t show it. According to the Obama administration the US economy is doing great, with jobs hitting the full employment level and GDP growth continuing slow but steady.
Cheers!
Apneaman on Mon, 4th Apr 2016 9:14 pm
Limits to Growth is on schedule. Collapse likely around 2020
http://energyskeptic.com/2016/limits-to-growth-is-on-schedule-collapse-likely-around-2020/
Dave thompson on Mon, 4th Apr 2016 9:41 pm
Abrupt climate change will make oil prices a moot point, in the not to distant future.
Apneaman on Mon, 4th Apr 2016 10:06 pm
Not even bankruptcy stops oil companies from pumping
“Texas-based Magnum Hunter Resources ( MHRCQ.PK ), the second-largest producer among publicly-traded companies that have filed for bankruptcy, is a case in point.
It filed for creditor protection last December, but even as the debt-laden driller scrambled to avoid that outcome, its oil and gas production rose by nearly a third between mid-2014 and late 2015, filings show.
Once in Chapter 11, its CEO Gary Evans said the bankruptcy, which injected new funds to ensure it would stay operational, could help to “position Magnum Hunter as a market leader.”
The company did not respond to a request for comment for this story. However, John Castellano, a restructuring specialist at Alix Partners, said that all of the nearly 3,000 wells in which Magnum Hunter owns stakes have continued operations during its bankruptcy.”
Read more: http://www.nasdaq.com/article/not-even-bankruptcy-stops-oil-companies-from-pumping-cm600951#ixzz44uwZlbq5
Magnum Hunter Resources? Really? Are you fucking serious?
Talk about compensating for a micro penis.
Christ is it ever fun to be alive as we approach peak retard.
Pennsyguy on Mon, 4th Apr 2016 10:08 pm
Who am I supposed to believe about the U.S. economy–the official truth or my lying eyes? If America was as prosperous for the majority as we are lead to believe, Donald Trump et al. would have very little traction and we could look forward to Bush vs. Clinton. Not that it matters at this point.
Apneaman on Mon, 4th Apr 2016 10:10 pm
Speaking of peak retard…..just when you think the pinnacle has been reached
BOOM!
Still climbing
The Inevitable Fallout of Naming Your Son ‘Hitler’ – w/video
http://www.theatlantic.com/video/index/476775/meet-the-hitlers/
Apneaman on Mon, 4th Apr 2016 10:22 pm
Pennsyguy, I hear ya. I’m in the greater Vancouver area and first moved here in 1976. I see homeless people and homeless camps all over – even out in the bedroom communities. Not only were they not here when I was young most of them only popped up in the last 5 years. In addition, all the food banks say they are overwhelmed and getting worse. All this in a country whose government and MSM likes to brag how Canada missed the recession. I would go with your gut and your eyes on this one. Not that it matters at this point;)
Pennsyguy on Mon, 4th Apr 2016 10:26 pm
Thanks Apnea! The people in the Great White North will still welcome American expats if the Donald wins–right??!!
Harquebus on Tue, 5th Apr 2016 2:12 am
There’s more to oil than just oil. As I have stated before, peak oil is hiding behind the biggest debt bubble in history.
“The only people who can’t see the recession in front of their noses are central bankers who are paid to lie, obfuscate, and mislead; corrupt politicians trying to get elected or re-elected; and media pundits whose job is to keep the sheep sedated with positive propaganda and a never ending stream of trivialities and drivel.”
“The central banker action plan of monetary easing, negative interest rates, printing trillions of new fiat, currency debasement, and buying the bad debt of the criminal banking cabal, has not improved the lives of average people living in the real world. They have improved the net worth of the .01% who rule the world. They have succeeded in making the ultra-rich ultra-richer.”
“this deranged monetary policy has raised the level of GDP, industrial production, and employment by barely 1% from what would have been expected in the absence of these interventions.”
“A world based on debt financed consumption will ultimately collapse under the weight of the debt.”
http://www.theburningplatform.com/2016/03/22/yellen-draghi-kuroda-deranged-lab-rats/
rockman on Tue, 5th Apr 2016 5:19 am
“…one charting global demand, which is more universally agreed upon…”. And stopped reading after that bullsh*t. Nice of him to give a warning. LOL.
Stabilizer on Tue, 5th Apr 2016 6:15 am
Dicker’s data examines the RIGHT numbers, supply and demand, nothing else matters.
I believe he’s wrong about demand, as economic growth is driving the curve upward, but being conservative is good.
His supply numbers are the first I’ve seen that make sense. Drilling has basically died WORLD WIDE. NOCs are pumping faster, but new supply is disappearing. Pumping existing resources faster is short term, within a year we will see a 5% drop. US tight oil is dead. Shut-in wells represent many sources, all of them small and short term.
Dicker is pretty good – but I expect $60 oil by summer 2016 and $70 oil by Christmas and at $70 we will see US tight oil ramp back up so we don’t pass $80 and maybe not $70. $60 is where we will settle long term
Davy on Tue, 5th Apr 2016 6:40 am
These processes and events are not in a vacuum. We are probably in a bumpy descent now with the oil complex in a supply/demand deflationary environment. The economy has left QE and zirp is now at increasing levels of diminishing returns. The next steps are nirp, eliminating large cash purchases, and government debit cards are not solutions just crutches. Bail-ins and other disguised economic taxes are probably at some point going to be used.
The biggest event by far is the China slow down. China was the actual physical manifestation of the global QE new normal. China kept our physical global economy growing with significant froth both the financial and the real. China is now normalizing as should be the case in a normal world with lower growth but this is not a normal world anymore. It is also a problem for China because of all the challenges the country faces making declining growth deadly.
This world is a new normal of financial control with the hangover of huge amounts of debt. This is basically just a black hole of reality debasement. It is a vicious circle of catch 22 problem and predicaments of limits to growth and diminishing returns especially of abstract financial gimmicks that extend and pretend a global slowdown.
Debt issues are more than just too much debt. The real debt issues that are deflationary are bad debt from years of malinvestment especially in China. China has never significantly realized and adjusted its aggregate debt. China has used endless games of extend and pretend to absorb debt into new areas or countless rehypothecation of collateral. The western central banks have been involved in the same policies it is just the west was already in decline. Western nations slowed their decline by being part of China’s growth. The real global growth was China and it lifted the whole world. If you can call it lifted. How is lifted good if the fall is from a higher point.
Financial adjustment is not in the cards anymore. A crash to a lower level of economic activity is a necessary results of global limits and diminishing returns. What has not dropped yet is confidence that glues it all together. Few people can comprehend the end of a status quo we are all habituated to. This creates a confidence conditioning. This is not necessarily optimism but a belief that although things will get bad or worse they will not fail. Many believe if only their policies would be used change would come for the better. There is no change for the better. A fall is ugly and painful. Initially the wealthy will avoid the worst like the last 9 years but they are close to realizing a hit through the markets that sooner or later are going to sink uncomfortably.
We are now seeing the oil demand and supply in dangerous disequilibrium globally. We are of course seeing the demand growth many crow about but this is not healthy demand growth. It is not driving the economy into productive activity. It is being sucked into a world growing and consuming more but we are not producing real productivity. In fact productivity is declining because of poor economic policy but also more expensive oil. Expensive in the sense of quality/quantity. Oil infrastructure is not being invested in. This is physical, human, and capex related. It is also a decline in the health of oil producing nations. Oil producing nations are in great stress. Whole producing areas could go offline from failing nations. This is about financial market stress with junk bonds going bad. This is not about one thing and price movement is not going to represent any one factor.
What will happen is a dirty brew of multiple processes and events combining to create wild gyrations in price that eventually will cause wild gyrations in the real of demand and supply? These gyrations will be a trend down. This is part of the end game of the global system. Our global system is surprisingly tough until fundamentals of growth are affected. Our system cannot slow down too much for too long. We had a bumpy plateau for several years where we used up precious resources and systematic strength to maintain the unsustainable.
All these activities were little more than rearranging deck chairs. Wealth transfer with extend and pretend policies is not growth. The real is now experiencing dysfunction and deflation. The real is what matters eventually. We are getting ever closer but since this is uncharted waters we have little to tell us where and when a break is going to occur. There is no reason we can’t maintain the status quo for another 10 years with the right circumstances. That said maintaining the status quo does not mean everyone will be maintained. People and nations are going to be kicked off the bus until the bus hits the brick wall.
joe on Tue, 5th Apr 2016 8:20 am
Good to see the Davy talking sense. The new normal is ‘SNAFU’. Im not just talking about oil, isis and the 110 year old imperial games played out in the m.e.
Its gonna be everything, and everywhere. History will say our biggest mistake is that we are greedy. Ancient Greeks used the word Hubris, its was a crime for which a society could be justly punished by the gods.
shortonoil on Tue, 5th Apr 2016 8:31 am
“they are not just pulled out of space, but with deep regard for the fundamental supply/demand picture that everyone mostly agrees upon,”
The fundamental problems is that author is attempting to use the supply and demand of the wrong thing to calculate the supply and demand of something else. That is like calculating the demand for horse shoes by calculating the number of people who want to ride horses. The demand for oil depends on the quantity of energy it delivers to the economy, not the number of barrels of black goo the industry can extract.
Differentiating between those two seems to be an insurmountable problem for those selling stock in oil companies? It might be the result of career biased myopia, or a general frontal lobe malfunction from smelling too many hydrocarbons fumes? Either way it results in a general confusion as to what is being supplied, and what is in demand. The industry is supplying black goo, the economy is demanding energy!
The energy delivery part is not doing very well! The industry has continuously removed the best quality of hydrocarbons it could find for the last 150 years. What it left behind was, not unsurprisingly, of lower quality than what they had just extracted. It took the high quality conventional, then the deep water, then the extra heavy, then the tar sands, and now the ultra, ultra light squeezed out of the equivalent of a subterranean brick yard. The industry has been able to supply the economy with black goo – it is just that it is getting a little short on what that economy is demanding; energy.
It is certainly not surprising that the price is going down; the industry is selling horse shoes to few, and fewer people who want to ride horses. Of course, if one is selling stock for a horse shoe manufacturer one doesn’t want to mention that point! Eventually the seller will give in and have a Going Out of Business Sale. It is certainly no surprise as to why the petroleum industry has already started theirs!
http://www.thehillsgroup.org/
Kenz300 on Tue, 5th Apr 2016 8:32 am
Electric cars, bikes and mass transit are the future…..fossil fuel ICE cars are the past…………..
Think teen agers vs your grand father………………….
cell phones vs land lines…….
NO EMISSIONS……..
climate change is real………we need to deal with the cause
marmico on Tue, 5th Apr 2016 8:36 am
Here is some support for my assertion
Snyder is a “red alert” chicken little fuctard.
http://theeconomiccollapseblog.com/archives/the-economic-collapse-blog-has-issued-a-red-alert-for-the-last-six-months-of-2015
Geosman on Tue, 5th Apr 2016 8:37 am
Thank you, as a carrier geologist who knows directly how things fell when the federal tax incentive for exploration was cancelled in the early 80’s this oil and gas recession is at least 10 if not 100 fold greater and the ramifications for recovery will be equally so. At last count Deutche bank and Wells Fargo likely have 54 billion invested in the Fracking industry and likely will never see a return on their investment. If large banks behave as they did after the 2007 mortgage and housing crash they will be reluctant to loan to anyone who does not have true liquid assets sufficient to cover the loan. Go figure…the loans they wrote for the fracking industry were based on “projected assets” which were again based on production from porous reservoirs that was equated with projected production from tight shales. In reality, tight formations may produce spectacularly following the initial opening of the well but these wells are now know to deplete themselves at least three times faster than traditional porous reservoir wells with some frack wells loosing as much as 68% of their initial capacity in the first 12 months of production. It’s pretty tough getting a return on investment with production falling off so rapidly. That’s something the investment brokers failed to understand or explain to a multitude of investors who put their retirement funds in the energy markets.
You look for the end of 2016 and 2017 for the turn-a-round in prices. I’ll give it until 2020 to hit hard we seem to run in a 6 year cycle and by that time the rigs will be rusted beyond repair and the crews who knew how to run them and who over-leveraged their own income will be homeless or flipping hamburgers.
It’s a sad sad time and all because this country does not have a regulatory means to impose drilling and production limitations that could have prevented such a massive fracking “gold rush” and the resulting surplus it created. Sometimes a free market economy is not the best way to run things.
Geosman on Tue, 5th Apr 2016 8:41 am
Thank you, as a carrer geologist who knows directly how things fell when the federal tax incentive for exploration was cancelled in the early 80’s this oil and gas recession is at least 10 if not 100 fold greater and the ramifications for recovery will be equally so. At last count Deutche bank and Wells Fargo likely have 54 billion invested in the Fracking industry and likely will never see a return on their investment. If large banks behave as they did after the 2007 mortgage and housing crash they will be reluctant to loan to anyone who does not have true liquid assets sufficient to cover the loan. Go figure…the loans they wrote for the fracking industry were based on “projected assets” which were again based on production from porous reservoirs that was equated with projected production from tight shales. In reality, tight formations may produce spectacularly following the initial opening of the well but these wells are now know to deplete themselves at least three times faster than traditional porous reservoir wells with some frack wells loosing as much as 68% of their initial capacity in the first 12 months of production. It’s pretty tough getting a return on investment with production falling off so rapidly. That’s something the investment brokers failed to understand or explain to a multitude of investors who put their retirement funds in the energy markets.
You look for the end of 2016 and 2017 for the turn-a-round in prices. I’ll give it until 2020 to hit hard we seem to run in a 6 year cycle and by that time the rigs will be rusted beyond repair and the crews who knew how to run them and who over-leveraged their own income will be homeless or flipping hamburgers.
It’s a sad sad time and all because this country does not have a regulatory means to impose drilling and production limitations that could have prevented such a massive fracking “gold rush” and the resulting surplus it created. Sometimes a free market economy is not the best way to run things.
penury on Tue, 5th Apr 2016 9:50 am
What is this “free market” of which you speak? Where could one find it? As long as CNs keep supporting the “bamls” by buying all bad lo9ans, there is no free market.
Robert Spoley on Tue, 5th Apr 2016 10:29 am
Once again the constant that runs through all the comments and is then minimized is “TIME”. What happens, why it happens and when it happens with the resulting fallout is mostly speculation. Resources will deplete over time and a “way of life” will deteriorate or end if replacements are not found/developed. Chances are that most of the desired relief will not be found/developed in time and the deterioration will take place. There are way too many of us NOW for that not to take place. Mother Nature will correct that imbalance. The cold stiff winds of reality will destroy the Ponzi Scheme House of Cards we are all living in. That scheme is debt, inability to practice “self discipline” and to pay attention to the “musts” instead of the “wants”. We only have ourselves to blame and we are all “GUILTY AS CHARGED”.
Apneaman on Tue, 5th Apr 2016 10:46 am
marmi, so Snyder works for Homeland security?
Dano on Tue, 5th Apr 2016 10:46 am
I agree 100%. Your not the only one who has these views, Ive been loading up on shares all the way down and now all the way up again. The only constant in this industry is that money drives production increases, and it also drives decreases (lack of money that is). The oil sector has gone too far in the opposite direction to quickly spin back up once demand out paces supply. Many nations who rely on $70+ oil cant continue at this pace. Saudi’s are losing thier cash cushion by hundreds of millions of dollars a year. Once we pass the X point he discusses in the story its going to take off. I expect that oil will top $200 this time around. It will probably take several years, Im thinking 3-5, but it will get there again. Im thinking $55-$70 by years end, then it takes off next year to around $110-$130. The following year it should spike up as high as it will get and stay there for 6-12 months before production catches up again. At that point Ill be divested and moving on to something else as I think this will be the last big run of oil. Alternatives should catch up/replace demand in 6-10 years.
HARM on Tue, 5th Apr 2016 12:44 pm
No, it’ not very likely oil will not hit $120/BBL USD anytime soon. Not with KSA, Russia, Iran, Iraq, and U.S. frackers drilling and pumping flat out.
As Planter pointed out, current prices accurately reflect the fact we are in a classic GLUT now. Many small potato fracking companies here will go belly up with current prices, and then get swallowed by the big guys, but… that’s the nature of that business.
Invest at your peril.
HARM on Tue, 5th Apr 2016 12:48 pm
@Apneaman,
Since you’re in Vancouver BC, can you tell us how your wonderful “bull market” in housing is working out for average Canadians? From what we hear in the MSM, everyone is just *thrilled* that the price of an average house is $1.6 million and steadily rising, especially young Canucks who just need a place to live. Must be that rising tide that lifts all yachts we’ve heard so much about.
Apneaman on Tue, 5th Apr 2016 1:18 pm
Other than I have to pay way too much in property tax, I can tell you that my best guess is that it’s going to POP and many regular working folks are going to get burned. Not as much as in the US in 2008 since you actually have to have an income source and a down payment to get a mortgage here. Clever Canadian finical monkeys are working on no money down schemes from what I hear. My two young twenty something Canuck nephews are low income workers who live right in Vancouver. They live in an old apartment suite with two others. They have to, to make the rent. Their neighbourhood is being quickly gentrified and they will soon be priced out of there. Like the American dream the Canadian dream is available to ever fewer young people every year. The new dream for many is to own both a smart phone and a vehicle. Luckily they now have 7 year auto financing to go with the payday loans. When I was their age (25 years ago-ish) we would have laughed our asses off at such a thing.
Dream on kids.
shortonoil on Tue, 5th Apr 2016 1:22 pm
“The only constant in this industry is that money drives production increases, and it also drives decreases (lack of money that is).”
The extractive portion of the petroleum industry has seen its revenue fall by $2.3 trillion/ year in the last 21 months. Those are funds that will never be retrieved. The reason is that the price can never again be high enough to compensate for that loss. The depletion process that has been going on for the last 150 years has now made more than half of all petroleum more expensive to produce than the economy can afford to pay for it; there are only 5.88 million BTU in a barrel of oil, and that is all there is ever going to be.
The world has now removed 84% of all the petroleum than can ever be extracted. The world’s petroleum reserve is not an infinite energy well, and the vast majority of the energy that could be removed already has been. Without that energy there is no economy, and without that economy there is no demand for oil. If anyone is waiting for a significant enough price recovery to bring the industry back to its previous days of glory; they are merely pursuing a fool’s errand!
http://www.thehillsgroup.org/
Sherill Sheldon on Tue, 5th Apr 2016 1:59 pm
I worked in the oil patch for thirty one years. There have been several boom and bust cycles during that time. When the price of oil is high oil companys borrow as much as they can plan a return on. They sign contracts for projects that start two years after planning is complete. So the oil production was still coming on line while the prices were falling. The rig count is now at a seventy year low. There are no new major plans to open up new fields for quite some time. From information and practical experience oil fields decline six percent a year. The last information I have found says world production is at 85 million bbls a day that may be correct or not. If it is true they say it is 10 million bbls over supply a day. So if most companys have stopped major projects in two years or less the price of oil will start up. But for the production to meet demand there will have to be another boom cycle.
GregT on Tue, 5th Apr 2016 2:19 pm
“But for the production to meet demand there will have to be another boom cycle.”
And for another boom cycle to occur, there will have to be new discoveries, or untapped reserves of oil, that are profitable to produce. Either that, or oil prices will need to climb even higher than they already are today. Current high oil prices are already problematic for our economies, and are still not low enough for recovery from the global financial crisis, which was brought on by high energy costs. The goldilocks range of oil prices is a thing of the past. Too high for economic recovery, and too low for continued current production.
HARM on Tue, 5th Apr 2016 2:31 pm
@apneaman,
That’s very sad. Until VC prices went into orbit the past several years, I had hoped our Canadian neighbors had learned a thing or two from our (bad) example. I guess not so much.
Like Carlin famously said, “they call it the American Dream because you have to be asleep to believe it”.
GregT on Tue, 5th Apr 2016 3:12 pm
@Harm,
“I had hoped our Canadian neighbors had learned a thing or two from our (bad) example.”
Some of us did, at least. My wife and myself bailed from Vancouver 9 months ago. Almost like winning the lottery!
John on Tue, 5th Apr 2016 4:04 pm
That’s great, another author is betting on a cycle….
makati1 on Tue, 5th Apr 2016 7:20 pm
Spot on GregT. We are in uncharted economic and ecological territory. The past is no proof of the future. Cycles and graphs are worthless. Soon we will hit the hockey stick in global temperatures and global financial depression. Then survival will be the only thing we think about. I don’t think either is very far off. Both can happen rapidly. We shall see.
makati1 on Tue, 5th Apr 2016 7:36 pm
Ap, when I was 20ish, five decades ago, you needed 20% down to buy a home plus fees, a provable income and the mortgage was limited to 20 years. Cars were maybe 10% down and only 3 years to pay, again with a provable income.
I recently saw an ad for a Sears home package that sold for $965. or about 60% of an average wage that year, 1916. The government inflation calculator said it would cost about $20,000 today. That shows just how much the government manipulates its numbers and the bloat of today’s Western economy. I estimated that it could not be built for less than $100,000 today. Maybe more in some areas.
I’m glad you made the choice to take the money and run from Vancouver. I visited there once about 10 years ago. Nice city. Great views. Too cold in the winter.
Maybe you nephews could do like the Mexicans and live 10-12 to an apartment? Oops! Probably zoning laws or lease regulations preventing that.
Denial on Wed, 6th Apr 2016 8:59 am
Some of us did, at least. My wife and myself bailed from Vancouver 9 months ago. Almost like winning the lottery!
Yeah lottery to hell when the whole thing crashes
GregT on Wed, 6th Apr 2016 10:44 am
“Yeah lottery to hell when the whole thing crashes”
We used the “proceeds” to position ourselves as far removed from the system as possible. Our biggest concern isn’t a financial crash, but an environmental one. If current trends continue, water stress will most likely be a big shorter term hurdle, but we’re working on that one as well.
HARM on Wed, 6th Apr 2016 11:09 am
Good for you, GregT. The elite have made it very difficult to fully disconnect yourself from the debt/credit matrix, but I imagine very rewarding. I personally have a long way to go.