Thursday, August 13, 2009

Prosperity for God's People - Thursday August 13, 2009

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The Saudi Arabia Next Door

By Byron King

08/13/09 Pittsburgh, Pennsylvania

I had the unique opportunity to tour two different oil sands operations near Fort McMurray, in northern Alberta. I saw a massive open-pit oil sands mine, and the associated reclamation effort, operated by Syncrude Canada Ltd. I also visited an in situ oil sands recovery project called Surmont, operated by ConocoPhillips.

When we think about the concept of ’Peak Oil’ today, we need to keep in mind what we’re talking about. The curves show oil output peaking in so many parts of the world. This phenomenon is quite real, as long as you understand that it’s the light, sweet, easy-flowing oil that is getting harder and harder to find, certainly in significant quantity.

But there are a lot of other hydrocarbon molecules out there. Most of those molecules are not light, sweet crude oil. Indeed, most of the hydrocarbon molecules that the world will use in the future will be ’heavy,’ with lots of carbon atoms and not so many hydrogen atoms.

Here’s a graph from oil services giant Schlumberger that estimates the world’s heavy oil and bitumen resources. Canada’s 400 billion cubic meters of bitumen translates into something like 1.4 trillion barrels of oil equivalent. How much is that? Well, it’s about SEVEN times the total oil reserves of Saudi Arabia.

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Sure, there are still issues about land disturbance, settling ponds, water usage, gas usage and myriad of other things that come up when you’re spending billions of dollars on a major mining effort. But Syncrude has built its business model…Read more…

No More Giveaways; No More Recovery

By Bill Bonner

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08/13/09 Ouzilly, France

Hey…how ’bout this rally!

The Dow was up 120 points yesterday. Now, we’re beating the bounce of 1930. The post-crash bounce in 1930 lasted fifth months. Ours began on March 9th…so it is now in its sixth month.

And like 1930, people are coming to believe that recession is almost over…and happy times are here again.

Heck, we’re sure the trouble is behind us now; 53 economists said so!

According to Bloomberg:

“The economy will expand 2 percent or more in four straight quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly Bloomberg News survey. Analysts lifted their estimate for the third quarter by 1.2 percentage points compared with July, the biggest such boost in surveys dating from May 2003.

“‘We’ve averted the worst, and there are clear signs the stimulus is working,’ said Kenneth Goldstein, an economist at the Conference Board in New York.

“‘Cash-for-clunkers was the icing on the cake,’ said David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. ‘It’s well-timed stimulus syncing with cyclical forces leading to a ramping up of production.’”

Yes, now the economy is firing on all cylinders…or just about. Yep. No doubt about it. Still, there are some nagging doubts. The latest figures show foreclosures still increasing – up 7% in July from a year before. And house prices are still going down. And unemployment is still going up. And consumer prices are…Read more…


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