Watching the ethanol rack prices falling nationally tells me I am right.

Lots of hurt coming to the corn states. I do not wish that upon them but it will happen.

Joe, can you offer some insight on how lowering oil price is affecting ethanol production?

John McCormick

[JR: take a look at the one year stock chart of any ethanol company, like Pacific ethanol (PEIX) or VeraSun Energy (VSE). It ain’t pretty. Much sharper drops than the rest of the economy as a whole. I haven’t looked at the production figures, but of course we have a government mandate which drives that. Existing ethanol is virtually all from corn, which is simply a terrible idea as I and others have said many times. The price collapse in oil obviously hurts all alternative fuels.]

Gas will probably be 2.70 a gallon for the next five years on average. The key factor right now is how much Canadian oil sands really cost and at what point OPEC can drive those oils sands out of business.

the other questions is US demand structural (i.e. did people get rid of those SUVs and ship them to mexico) or just cyclical (did people drive 15 miles less a month this year, which amounted to 1 million b/d demand loss). If cyclical, it will pick up at 2.70.

CALLED IT!!!!!!!!!!

http://climateprogress.org/ 2008/ 05/ 06/ peak-a-boo-goldman-says-oil-likely-to-hit-150-200-by-2010-that-means-5-gasoline/

check out the comments section of that article where I mentioned that demand destruction due to worldwide recession would cause gas prices to drop, and that Goldman Sachs coming out with a $200/bbl oil call almost certainly was a contrarian indicator.

people followed up saying i was “nonsensical”.

yeah right.

I CALLED IT!!!!

WOOOO!!!!!

(I watch way too much colbert)

http://www.sciencedaily.com/ releases/ 2008/ 10/ 081009144327.htm

by maybe 5–10%

Peak oil is still lurking in the background, though. Any global recovery will meet the headwinds of expensive energy again unless there’s a major push towards renewables and green energy.

I’m still trying to figure out if the US dollar will devalue or not. Right now there is a very obvious panic to US currency, however, and a shortage of it (seems unbelievable given the $850bn bailout — but we’ve lost >$5T in US market cap and $3.7T in housing value so we are definitely in a deflationary spiral). We are more likely to see currency crises in foreign currencies (latin america is already trying to defend their currencies and there’s major selloffs in asia, and iceland was too small and has already gone under). I was wrong about gold and it has been holding its own in $USD, while in other currencies it is exploding as their currencies devalue.

After that I honestly don’t know what is left standing. I don’t know if this is just a bad recession in the US, or 30% unemployment great depression. If output is destroyed enough so that productivity and GDP fall so low that it sparks hyperinflation there could be a flight out of the US currency, but its way too early to see those signs. But there’s going to be a huge debt, higher interest rates and the spectre of peak oil and reinvigorated inflation waiting for any recovery that Obama engineers. Bush really screwed this country up… thanks for the extra $5T in debt right when we need to deficit spend, asshole…

While on the New York Mercantile Exchange, crude oil for November delivery fell as much as $3.08, or 3.6 per cent, to $83.51 a barrel, the lowest since October 2007.”

http://english.aljazeera.net/ business/ 2008/ 10/ 2008101015148546630.html

http://www.sciam.com/ article.cfm?id=using-plants-instead-of-petroleum-to-make-jet-fuel