wild ride or beggining of cruel rollercoaster, page-6

Welcome back to the board, Callent. Yep, things looking shaky.

Read this a week ago.

From the Daily Reckoning. (always a great read and is free)

--Only 36 more days until the U.S. Fed?s quantitative easing (part two) policy is set to expire. It?s been our contention here the Fed needs a big sell off in stocks and commodities so it can justify the next round of asset purchases. With asset prices?especially precious metals and oil high -QE3 would be a tough sell in the court of public opinion (might look inflationary).

--But if you wipe tens or hundreds of billions of dollars in market value from the stock market, and if you get silver shedding 25% in short order, then maybe the argument for more quantitative easing is an easier sell. Mind you we?re just speculating here. But the speculation is that a teeth-rattling sell-off in markets between now and the end of June would suit the Fed?s purposes quite nicely.

Hmmmmmm, do I hear printing presses?

And then oil.

--Enough of the guessing, though. Let?s turn to the prediction from Goldman Sachs and Morgan Stanley that Brent Crude oil will hit $130/barrel in 2012. Brent Crude is currently trading at $112. On the surface, predicting a 16% rise in oil prices over the next six months seems pretty...bland. Before selling off in early April, Brent Crude was up 30% for the year.

--Goldman?s analysts think demand growth and supply constraints will support oil prices. They wrote that, ?Economic growth will likely be sufficient to tighten key supply-constrained markets in the second half, leading to higher prices from current levels.? Their previous forecast was $107/barrel.

--Behind the tortured economist-speak is the idea that demand in key markets is still growing and supply from key markets will remain uncertain (that means you, Middle East and North Africa). On the demand side, energy research Platts has something to say about China. Platt?s say, ?China's demand for oil will grow 4-5% a year to hit 530 million-560 million metric tonnes (10.6 million b/d-11.3 million b/d) in 2015, with transport fuel and chemical feedstocks driving the increase.?

--Even if demand slows a bit in the coming years, Standard Chartered Bank reckons China?s demand for oil imports will catch up with the US by about 2030. Both behemoths?assuming they have not seamlessly switched to industrial economies that run on wind, solar, hydro, and warm fuzzies?will be importing around 18 million barrels of oil a day.

Iam. What can I say that already has not been said.
Cheers.