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ScottMelker
Jun 24, 2024

Mike, I wanted to ask you one more thing about oil, because you sort of hinted at it. You think that prices will obviously be lower. You said it from the morning meeting today that that's a good news for the consumer, one of the first kind of good news things we've seen here. We have an election, so you would think it's politically popular to manipulate the price of oil down, but we do have a Cold War and escalating tensions still in Israel and potential of Hezbollah and Iran and a full-scale war over there. How does all of this sort of weigh out for oil? And then I want to talk stocks after that question. It hurts the rest of the world and it's completely beneficial for US producers. Let's look at the center of the universe for producing energy has shifted from the Middle East to America, and that includes Canada. I mean, the excess of crude oil and liquid fuel supply in a daily basis is 6 million barrels a day if you include the US and Canada. 2008, the deficit was 10 million barrels a day. And then you look at natural gas. We are becoming the largest net exporter of LNG. So that's a problem for the rest of the world. And also those wars are not affecting supply. It's actually bringing on more. It's just the Russian supplies are going to China. China's not really importing much anymore, is less from OPEC, but it's also the facts of regional wars. They're bad for commodity prices. I love when people say commodity wars are good for commodities. Well, maybe World War II. I mean, none of us was alive then, but I was alive when an Iraq-Iran war kicked on and crude oil initially popped up from like about 13 to 40 in early 1908 and dropped to 10 in 1986. Same, I was in the trading pits and trading when Iraq invaded Kuwait. Crude oil initially popped from 20 to 40 and then dropped to 10 by 1998. And that was when the US wasn't incentivized to produce more. And that's happening in grains right now. That war just pumped up the US grain belt. I go out there all the time. I got a lot of friends and family there, and they're just reeling in profits, which are going away now because they created too much. It's just the way it works. It's the lessons of Jeff Booth. So that's that deflationary trend that always comes from you raise the bar too much. You just have to have deflation because the average price of a home in this country now used to be $200,000. Now it's close to 400, and then it just goes down a little. It's just the way it always happens. And all you need is a little bit of... And the thing is, it used to be recession. All those signs are there from my standpoint that I point out, I pointed out earlier, decline in demand for these things, but it's that elevated stock market that's gonna trigger everything. It's just two times GDP. It's just one of those things you have to be... Just look for alternatives. And Bitcoin was a great alternative until we got the ETFs launch. And I think that's the way prudent money managers are looking at it.

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