http://www.forbes.com/finance/2008/06/23/crude-biderman-margin-pf-etf... Sky-High Oil Will Make U.S. Go Broke Charles Biderman, TrimTabs 06.23.08, 7:00 PM ET Stratospheric crude oil prices precipitated by speculation are wreaking havoc on the U.S. economy. _base_d on income tax withholdings data from the Daily Treasury Statement, the wages of all U.S. workers on payrolls were unchanged on a year-over-year basis in the past two weeks (Friday, June 6 through Thursday, June 19) and rose 1.1% year-over-year in the past four weeks (Friday, May 23 through Thursday, June 19). Both of those growth rates are well below the 2.8% year-over-year in May, and they are consistent with an economy that is contracting sharply. As long as oil prices stay above $120 per barrel, the economy is more likely to slow than strengthen, and companies are not likely to announce much float shrink. With real wages falling, large numbers of jobs being shed, gas prices exceeding $4 per gallon almost everywhere and home prices falling about 1% per month nationally, this year is going to be tough for American consumers. Believe it or not, there is plenty of oil in the world. What is in short supply are investors willing to go short oil futures. The open interest on oil futures worldwide is 2.6 million contracts. With oil prices at $135 per barrel, each contract is worth $135,000. To control $135,000 of oil, investors have to put up no more than $10,000. A hefty $1.3 billion per month flowed into commodity trading advisers (CTAs) in the first four months of this year, and $700 million per month flowed into commodity exchange-traded funds (ETFs) in the first five months of this year. Those amounts do not even include investments through other vehicles by hedge funds and pension funds. The latest issue of Barron's reports that $55 billion flowed into commodity investments in the first quarter of 2008, and probably at least one-third of that amount was directed into long-only investments in oil. In any case, if half of the $2 billion per month inflow into CTAs and commodity ETFs were used to go long oil futures, it would be enough to go long 100,000 contracts, which is equal to 4% of the open interest on oil futures. In other words, open interest would grow roughly 50% per year just from inflows into CTAs and commodity ETFs. What is happening now is not demand destruction, it is a financial disaster. The U.S. consumes 21 million barrels of per day. At $135 per barrel, the U.S. spends $1.0 trillion per year on oil, which is equal to 15% of the $6.8 trillion in take-home pay of everyone who pays taxes. If oil prices rose to $200 per barrel, the U.S. would spend $1.5 trillion per year on oil, which would be equal to 22% of take- home pay. Moreover, those percentages of 15% and 22% do not even include the cost of coal or natural gas. In other words, the U.S. will be broke long before oil prices hit $200 per barrel, and the rest of the world would be sure to follow. Another way to put the oil crisis into perspective is to compare increased spending on oil to inflows into savings and investment vehicles. For every $60 per barrel increase in the price of oil, the U.S. spends an additional $450 billion annually, or $38 billion per month, on oil. In the past twelve months, the inflow into savings and investment vehicles

What an idiot. The oil money goes way.  Lands in china and other nations that hate the US. America is broke and going broker.   Look at your dime (used to be dollar)  and consider yourself lucky to still have a currency.   The Peso is now stronger then the buck. Fred is an Indian boiler room worker paid a buck a day to post dumb shit about how great things are.   Must be, his wife has tripled in size since the mexican moved in next door.

Everyone was saying that $50 and $100 oil would sink us.  It didn't. Half the trillion that we will spend on oil will be spent here and with a GDP of 13+ Trillion, it's not so bad.  The figures below are suspect. Looks like typical doom and gloom type of manipulation of numbers. Besides that, if you ask the doom and gloomers, we are already broke.  NOT! Fred There is the debt and the deficit. When you have to borrow from your visa to pay your mastercard  you are broke, and that's what the USA is doing.

Everyone was saying that $50 and $100 oil would sink us.  It didn't. Half the trillion that we will spend on oil will be spent here and with a GDP of 13+ Trillion, it's not so bad.  The figures below are suspect. Looks like typical doom and gloom type of manipulation of numbers. Besides that, if you ask the doom and gloomers, we are already broke.  NOT! Fred There is the debt and the deficit. When you have to borrow from your visa to pay your mastercard  you are broke, and that's what the USA is doing. And your reference for that statement is what?  Personal experience? LOL!  As high as our debt is, we are still not over-indebted.  The real facts don't support your contention at all. Fred

Everyone was saying that $50 and $100 oil would sink us.  It didn't. Half the trillion that we will spend on oil will be spent here and with a GDP of 13+ Trillion, it's not so bad.  The figures below are suspect. Looks like typical doom and gloom type of manipulation of numbers. Besides that, if you ask the doom and gloomers, we are already broke.  NOT! Fred There is the debt and the deficit. When you have to borrow from your visa to pay your mastercard  you are broke, and that's what the USA is doing. And your reference for that statement is what?  Personal experience? LOL!  As high as our debt is, we are still not over-indebted.  The real facts don't support your contention at all. what it is analogous to is refinancing your house every few years to cash out any equity appreciation which works because the value of your house always increases over time arf meow arf - raggedy ann and andy for president and vice limp and spineless lint for brains is  better yet and nice then rueing pair of shrub and dick the republican lice call me desdenova seven seven seven seven seven seven