Spot The Start Of The End Of The Keynesian Dream

Tyler Durden's picture

Presented with little comment, but while there are numerous reasons for elevated oil prices (from short-term supply disruptions, middle-east tensions, and emerging-market demand) it appears something broke in Q1 2009 between a proxy for world trade (or indeed for ship-building mal-investment in hope-driven excesses continuing) and the cost of fulfilling that demand. After 25 years of credit-driven Keynesian (monetary-to-fiscal-policy reach-around) planning, it would appear it is different this time as the potential for infinite supply of fiat currency clashes with the 'finite' supply of hard assets (crude oil in this case)... Much as we question who gained from Draghi's first year of action in Europe, we suggest this chart clarifies who did not benefit from Bernanke's experimentation...



(h/t Alexander Ac)

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q99x2's picture

Looks like QE causes inflation and collapse of world goods and services. That is more than enough proof for me. Arrest Bernanke now.

linrom's picture

China uses more oil; China builds more ships!

Wen Jiabao family meet the Onassis family.

max2205's picture

I keep telling you that high crude is the deal the US made with Saudi to play war in the middle east

e-recep's picture

best chart ever.

Herdee's picture

Nice looking "spread trade" between those two sectors.It's a totally different type of trading and a type of trading that most traders are unaware of.You can learn about "spreading" by reading a book by a very smart trader named Courtney Smith.His book is called Futures Spread Trading:The Complete Guide.You can Spread trade just about anything against something else and make money on the difference,ie:Long one -Short two

MrSteve's picture

Time for everyone to remember that the Panama Canal has been / is being renovated to handle bigger ships, much bigger ships.

Check this site, for instance.

Google your idea about Panama Canal and you might get facts to inform your own thinking, the best kind to do.

For instance, I could chart honey bee hive collapse counts against the FRB's balance sheet expansion and you would have yet another meaningless chart, no?

A Newton-Einstein level of basic reality is that correlation does not imply causation. Remember that when you see any chart proposing causation, such as honey bee population and FRB trillions of QEasy money.



indygo55's picture

"Oh god not this shit again. Please state all available evidence of abiotic oil, and also state the evidence that abiotic replenishes the reserves as fast as our rate of extraction."

It is a plausable and pretty well documented theroy, in Russia that is. You probably call it fossil fuel as well. But when you find oil at 13KM down, way below any fossils and way below where anyone else has drilled you have to at least give it pause. There would be a great number of people who would benefit from the truth (should it be true) being hidden for as long as possible.

Read below:


SKY85hawk's picture

Re: Avoiding the Fiscal Cliff

Why is everyone saying the legislated changes must be stopped? 

At the same time the media say spending must be reduced and 'revenue' increased!


These fearsome changes have been needed for many years.  Something has to change in the way politicians buy votes and voters acquire 'benefits'.


Finally, I wonder why few pundits try to remind people that Keynes said the additional debt must be paid back during the good times.

Remember "Surpluses as far as the eye can see" in 1999-2000?


We have only ourselves to blame for the irresponsible abuse of the Public Checkbook!. 


I look forward to your howls of denial!