Julian Phillips at Goldforecaster.com writes that Saudi Arabia, the major oil
exporter, "exported more oil to China than to the United States last year",
which is kind of surprising but not too alarming if you have been taking your
medications as prescribed, or if the rise in Chinese consumption was not too
severe, but instead imports were rising gently in a non-threatening way, so
that consumption was not soaring and everything was kind of just, you know,
perking along real peachy.
Unfortunately for me, neither of these conditions apply, as, for one thing, I
am too smart and paranoid to take orders from some quack doctor about when, or
even if, I take some mysterious pills he wants me to take that are supposed to
"help" me, and which my wife and family are always reminding me to take for
dark
reasons of their own, which probably proves they are in cahoots with the doctor
and they're all out to get me. I only hope I can prove it before these pills
get me!
And for another thing, consumption of oil by the Chinese is not quiescent, but
is literally soaring to the freaking moon!
Notice how, in contrast to the way I am bouncing off the walls about this, Mr
Phillips smoothly eases you along, as if nothing is wrong, when he quietly
says, "Saudi sales to China surged above a million barrels a day last year",
which is just a disconnected fact that is floating around, to which you pay no
attention, like it's just another apparently random fact, like the fact that
"exports to the United States fell to 989,000 barrels a day, the lowest level
in 22 years", and pretty soon your mind starts wandering, and you start
thinking about getting something to eat, and then this "oil thing" reminds you
that you are low on gasoline and you have to stop and get some, which is
irritating until you remember a nearby place that sells both gas and yummy food
- like glazed donuts! - and so you are starting to feel pretty good about the
upcoming sugar buzz and, continuing, maybe a large cup of espresso coffee to
give you a caffeine boost into Super Mogambo Power Overload (SMPO).
Pleasantly distracted like this, you are blissfully quite unprepared for Mr
Phillips to deliver the shocking news that not only have the Saudi exports of
oil to China "surged above a million barrels a day last year, but that was
nearly doubling from the previous year"! Doubling! Yikes! Yikes! Yikes!
I am, in a word, nonplussed, stunned to catatonic drooling by the very concept
of oil imports doubling every year, which is an incomprehensible feat, made
worse by the fact that the Chinese are not starting from zero consumption, as
"Chinese oil consumption reached 8.5 million barrels a day last year, compared
with 4.8 million in 2000", whereas "The United States consumed 18.5 million
barrels a day in 2009."
But quickly reaching infinity oil imports, an inevitable result of an annual
doubling, is clearly impossible, so where is a good place for oil consumption
to level out? I have no idea, and have no interest in finding out because it
would take work, or at least some minimum effort, on my part to find out.
But if you are so inclined, maybe a place to start is when Mr Phillips offers
the factoids that "That amounts to 22 barrels of oil a year for each American,
compared with 2.4 barrels for each Chinese. To get some perspective on this
growth, look at Chinese growth in oil demand growing roughly in line with their
car markets [much of Chinese industry relies on oil]. Their car market grew 46%
in December year-on-year. Compare populations: 300 million US: 1.4 billion
China."
And although Mr Phillips did not specifically say it, but would if given the
chance, I am sure, investing in oil companies in anticipation of such
guaranteed increased demand is only one third of the Fabulous Mogambo Portfolio
Of Sure-Fire Investments (FMPOSFI), the other two being gold and silver, of
which Mr Phillips must be acutely acquainted through his own newsletter, the
Gold Forecaster, and thus intensely bullish about them, too.
Summing up, Mr Phillips and I now comprise an official group of two, and we
say, in unison, that you are an idiot if you are not investing in gold, silver
and oil according to the FMPOSFI, although I am the only one of us who will
tell you, right to your face, that you are an idiot for not doing it. And if
you are wearing ugly shoes or if you haircut looks stupid, I'll tell you that,
too, which only shows you what a peach of a guy I am.
Mr Phillips is apparently too classy a guy to say such things to you, or even
think them, which may explain why he won't even answer my telephone calls to
ask him, yes or no, if he thinks you are an idiot for not investing in my
recommended gold, silver and oil portfolio. I note, for the record, that he
never said he didn't, or wouldn't, which is good enough for me to say he does,
and if he starts squawking about it, then it's back to just me telling you that
you are an idiot if you are not buying gold, silver and oil.
Perhaps, though, he will join me in singing the Fabulous Mogambo Portfolio Of
Sure-Fire Investments (FMPOSFI) theme song, which goes "Whee! This investing
stuff is easy! It's easy! It's easy! Whee! This investing stuff is easy, so
let's par-tay!"
Richard Daughty is general partner and COO for Smith Consultant Group,
serving the financial and medical communities, and the editor of The Mogambo
Guru economic newsletter - an avocational exercise to heap disrespect on those
who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2010, The Daily Reckoning.)
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