"There Will Be Blood": Petrodollar Death Means A Liquidity And Oil-Exporting Crisis On Deck

Tyler Durden's picture

Recently we posted the following article commenting on the impact of USD appreciation and dollar circulation among oil exporters, as well as how the collapsing price of oil is set to reverberate across the entire oil-exporting world, where sticky high oil prices were a key reason for social stability. Following today's shocking OPEC announcement and the epic collapse in crude prices, it is time to repost it now that everyone is desperate to become a bear market oil expert, if only on Twitter...

How The Petrodollar Quietly Died, And Nobody Noticed

Two years ago, in hushed tones at first, then ever louder, the financial world began discussing that which shall never be discussed in polite company - the end of the system that according to many has framed and facilitated the US Dollar's reserve currency status: the Petrodollar, or the world in which oil export countries would recycle the dollars they received in exchange for their oil exports, by purchasing more USD-denominated assets, boosting the financial strength of the reserve currency, leading to even higher asset prices and even more USD-denominated purchases, and so forth, in a virtuous (especially if one held US-denominated assets and printed US currency) loop.

The main thrust for this shift away from the USD, if primarily in the non-mainstream media, was that with Russia and China, as well as the rest of the BRIC nations, increasingly seeking to distance themselves from the US-led, "developed world" status quo spearheaded by the IMF, global trade would increasingly take place through bilateral arrangements which bypass the (Petro)dollar entirely. And sure enough, this has certainly been taking place, as first Russia and China, together with Iran, and ever more developing nations, have transacted among each other, bypassing the USD entirely, instead engaging in bilateral trade arrangements, leading to, among other thing, such discussions as, in today's FT, why China's Renminbi offshore market has gone from nothing to billions in a short space of time.

And yet, few would have believed that the Petrodollar did indeed quietly die, although ironically, without much input from either Russia or China, and paradoxically, mostly as a result of the actions of none other than the Fed itself, with its strong dollar policy, and to a lesser extent Saudi Arabia too, which by glutting the world with crude, first intended to crush Putin, and subsequently, to take out the US crude cost-curve, may have Plaxico'ed both itself, and its closest Petrodollar trading partner, the US of A.

As Reuters reports, for the first time in almost two decades, energy-exporting countries are set to pull their "petrodollars" out of world markets this year, citing a study by BNP Paribas (more details below). Basically, the Petrodollar, long serving as the US leverage to encourage and facilitate USD recycling, and a steady reinvestment in US-denominated assets by the Oil exporting nations, and thus a means to steadily increase the nominal price of all USD-priced assets, just drove itself into irrelevance.

A consequence of this year's dramatic drop in oil prices, the shift is likely to cause global market liquidity to fall, the study showed.

This decline follows years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.

But no more: "this year the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations."

In short, the Petrodollar may not have died per se, at least not yet since the USD is still holding on to the reserve currency title if only for just a little longer, but it has managed to price itself into irrelevance, which from a USD-recycling standpoint, is essentially the same thing.

According to BNP, Petrodollar recycling peaked at $511 billion in 2006, or just about the time crude prices were preparing to go to $200, per Goldman Sachs. It is also the time when capital markets hit all time highs, only without the artificial crutches of every single central bank propping up the S&P ponzi house of cards on a daily basis. What happened after is known to all...

"At its peak, about $500 billion a year was being recycled back into financial markets. This will be the first year in a long time that energy exporters will be sucking capital out," said David Spegel, global head of emerging market sovereign and corporate Research at BNP.

 

Spegel acknowledged that the net withdrawal was small. But he added: "What is interesting is they are draining rather than providing capital that is moving global liquidity. If oil prices fall further in coming years, energy producers will need more capital even if just to repay bonds."

In other words, oil exporters are now pulling liquidity out of financial markets rather than putting money in. That could result in higher borrowing costs for governments, companies, and ultimately, consumers as money becomes scarcer.

Which is hardly great news: because in a world in which central banks are actively soaking up high-quality collateral, at a pace that is unprecedented in history, and led to the world's allegedly most liquid bond market to suffer a 10-sigma move on October 15, the last thing the market needs is even less liquidity, and even sharper moves on ever less volume, until finally the next big sell order crushes the entire market or at least force the [NYSE|Nasdaq|BATS|Sigma X] to shut down indefinitely until further notice. 

So what happens next, now that the primary USD-recycling mechanism of the past 2 decades is no longer applicable? Well, nothing good.

Here are the highlights of David Spegel's note Energy price shock scenarios: Impact on EM ratings, funding gaps, debt, inflation and fiscal risks.

Whatever the reason, whether a function of supply, demand or political risks, oil prices plummeted in Q3 2014 and remain volatile. Theories related to the price plunge vary widely: some argue it is an additional means for Western allies in the Middle East to punish Russia. Others state it is the result of a price war between Opec and new shale oil producers. In the end, it may just reflect the traditional inverted relationship between the international value of the dollar and the price of hard-currency-based commodities (Figure 6). In any event, the impact of the energy price drop will be wide-ranging (if sustained) and will have implications for debt service costs, inflation, fiscal accounts and GDP growth.

Have you noticed a reduction of financial markets liquidity?

Outside from the domestic economic impact within EMs due to the downward oil price shock, we believe that the implications for financial market liquidity via the reduced recycling of petrodollars should not be underestimated. Because energy exporters do not fully invest their export receipts and effectively ‘save’ a considerable portion of their income, these surplus funds find their way back into bank deposits (fuelling the loan market) as well as into financial markets and other assets. This capital has helped fund debt among importers, helping to boost overall growth as well as other financial markets liquidity conditions.

Last year, capital flows from energy exporting countries (see list in Figure 12) amounted to USD812bn (Figure 3), with USD109bn taking the form of financial portfolio capital and USD177bn in the form of direct equity investment and USD527bn of other capital over half of which we estimate made its way into bank deposits (ie and therefore mostly into loan markets).

The recycling of petro-dollars has benefited financial markets liquidity conditions. However, this year, we expect that incremental liquidity typically provided by such recycled flows will be markedly reduced, estimating that direct and other capital outflows from energy exporters will have declined by USD253bn YoY. Of course, these economies also receive inward capital, so on a net basis, the additional capital provided externally is much lower. This year, we expect that net capital flows will be negative for EM, representing the first net inflow of capital (USD8bn) for the first time in eighteen years. This compares with USD60bn last year, which itself was down from USD248bn in 2012. At its peak, recycled EM petro dollars amounted to USD511bn back in 2006. The declines seen since 2006 not only reflect the changed  global environment, but also the propensity of underlying exporters to begin investing the money domestically rather than save. The implications for financial markets liquidity - not to mention related downward pressure on US Treasury yields – is negative.

* * *

Even scarcer liquidity in US Capital markets aside, this is how BNP sees the inflation and growth for energy exporters:

Household consumption benefits: While we recognise that the relationship is not entirely linear, we use inflation basket weights for ‘transportation’ and ‘household & utilities’ (shown in the ‘Economic components’ section of Figure 27) as a means to address the differing demand elasticities prevalent across countries. These act as our proxy for consumption the consumption basket in order to determine the economic benefit that would result as lower energy prices improve household disposable income. This is weighted by the level of domestic consumption relative to the economy, which we also show in the ‘Economic components’ section of Figure 27.

Reduced industrial production costs: Outside the energy industry, manufacturers will benefit from falling operating costs. Agriculture will not benefit as much and services will benefit even less.

Trade gains and losses: Lost trade as a result of lower demand from oil-producing trade partners will impact both growth and the current account balance. On the other hand, better consumption from many energy-importing trade partners will provide some offset. The percentage of each country’s exports to energy producing partners represents relative to its total exports is used to determine potential lost growth and CAR due to lower demand from trade partners.

Domestic FX moves are beyond the scope of our analysis. These will be tied to the level of openness of the economy and the impact of changed demand conditions among trade partners as well as dollar effects. Neither do we address non-oil related political risks (eg sanctions) or any fiscal or monetary policy responses to oil shocks.

GDP growth

The least impacted oil producing country, from a GDP perspective, is Brazil followed by Mexico, Argentina, Tunisia and Trinidad & Tobago. The impact on fiscal accounts also appears lower for these than most other EMs.

Remarkably, the impact of lower oil for Russia’s economic growth is not as severe as might be expected. Sustained oil at USD80/bbl would see growth slow by 1.8pp to 0.6%. This compares with the worst hit economies of Angola (where growth is nearly 8pp lower at -2%), Iraq (GDP slows to -1.6% from 4.5% growth), Kazakhstan and Azerbaijan (growth falls to -0.9% from 5.8%).

For a drop to USD 80/bbl, it can be seen (in Figure 27) that, in some cases, such as the UAE, Qatar and Kuwait, the negative impact on GDP can be comfortably offset by fiscal stimulus. These economies will probably benefit from such a policy in which case our ‘model-based’ GDP growth estimate would represent the low end of the likely outcome (unless a fiscal policy response is not forthcoming).

 

Global growth in 2015? More like how great will the hit to GDP be if oil prices don't rebound immediately?

On the whole, we can say that the fall in oil prices will prove negative, shaving 0.4pp from 2015 EM GDP growth. The collective current account balance will fall 0.58pp to 0.6% of GDP, while the budget deficit will deteriorate by 0.61pp to -2.9%. This probably has the worst implications for EM as an asset class in the credit world.

Energy exporters will fare worst, with growth falling by 1.9pp and their current account balances suffering negative pressure to the tune of 2.69pp of GDP. Budget balances will suffer a 1.67pp of GDP fall, despite benefits from lower subsidy costs. The impact of oil falling USD 25/bbl will be likely to put push the current account balance into deficit, with our analysis indicating a 0.3% of GDP deficit from a 2.4% surplus before. Fortunately, the benefit to inflation will be the best in EM and could help offset some of the political risks from reduced growth.

As might be expected, energy importers will benefit by 0.4pp better growth in this scenario. Their collective current account will improve by 0.6pp to 1.1% of GDP.

The regions worst hit are the Middle East, with GDP growth slowing to 0.3%, which is 3.8pp lower than when oil was averaging USD105/bbl. The regions’ fiscal accounts will also suffer most in EM, moving from a 1.7% of GDP surplus to a 1.8% deficit. Meanwhile, the CAB will drop 5.3pp, although remain in surplus at 3.9%. The CIS is the next-worst hit, from a GDP perspective, with regional growth flat-lined versus 1.91% previously. The region’s fiscal deficit will worsen from 0.7% of GDP to -1.8% and CAB shrink to 0.7% from 3% of GDP. Africa’s growth will come in 1.4pp slower at 2.8% while Latam growth will be 0.4pp slower at 2.2%. For Africa, the CAB/GDP ratio will fall by 2.4pp pushing it deep into deficit (-2.9% of GDP).

Some regions benefit, however, with Asia ex-China growing 0.45bpp faster at 5.5% and EM Europe (ex-CIS) growing 0.55pp faster at 3.9%, with the region’s CAB/GDP improving 0.69pp, although remain in deficit to the tune of -2.4% of GDP.

* * *

And so on, but to summarize, here are the key points once more:

  • The stronger US dollar is having an inverse impact on dollar-denominated commodity prices, including oil. This will affect emerging market (EM) credit quality in various ways.
  • The implications of reduced recycled petrodollars has significant ramifications for financial markets, loan markets and Treasury yields. In fact, EM energy exporters will post their first net drain on global capital (USD8bn) in eighteen years.
  • Oil and gas exporting EMs account for 26% of total EM GDP and 21% of external bonds. For these economies, the impact will be on lost fiscal revenue, lost GDP growth and the contribution to reserves of oil and gas-related export receipts. Together, these will have a significant effect on sustainability and liquidity ratios and as a consequence are negative for dollar debt-servicing risks and credit ratings.

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db51's picture

This will be old news by Friday.  Print more.   Worry less.   All is well.   W T F....No riots today.   and I hate football.

Keyser's picture

The sheeple are celebrating $2.50 gasoline at the pump going into shopping season... Little do they know the impact of $60 oil in the long term... 

CrazyCooter's picture

This ZH article is going on several years old now ... but I still think it's thesis is pretty spot on ...

http://www.zerohedge.com/news/2012-11-24/goodbye-petrodollar-hello-agri-...

The list of countries that import all their food are at the highest risk of being completely fucked when the petro-dollar tanks. Gold might be next in line. It might be SDRs. Maybe the Yuan steps up and gets a bigger share of the reserve currency pie. It may very well just be chaos.

It is important to remember that all these BS fiat games enable trade/consumption that ain't gonna happen on a "more honest" system of accounting. That means everyone tightens belts all the way around.

Regards,

Cooter

Arius's picture

yes, everything and everyone will go down ... there will be no winners... it reminds me of the old saying to ZH ... be careful what you wish for !

johngaltfla's picture

The commodities market trading tomorrow and on Monday will redefine "Black Friday" for many years to come. There is a currency crisis about to hit and the US public is so damned ignorant about it, it is hilarious.

NoDebt's picture

So if the problem is not enough dollars being fed to the rest of the world to recycle, would the recent price drop not cause the US to shift away from using it's own (more expensive to produce) oil and again tilt the tables in favor of importing, thus sending more US Dollars out into the world to again restart the "recycling" process?

 

El Hosel's picture

... the Fed traders might have to sell airlines and retailers to buy oil.

847328_3527's picture

"Impacts" make my nose bleed.

rocker's picture

Zero Hedge has supported the Peak Oil Theorist.

Why change colors now. Is this herd chasing.

0b1knob's picture

Things can't be that bad or you would be seeing oil executives jumping off buildings.  Oh wait....

http://www.bloomberg.com/news/2014-11-27/head-of-enel-s-romanian-units-d...

 

Squid-puppets a-go-go's picture

aside from the impact on the shale industry, this analysis shows how catastophic the oil drop is to america. I no longer beleive the idea that USA & saudi Arabia colluded to drive oil down to hit russia. I think the US govt is really stupid, but not really totally absolutely hopelessly stupid.

I rather beleive that saudi arabia did it on its own, or possibly in the wake of some clandestine shift in alliance to china

Baldrick's picture

didn't KSA have a "get together" with Russia and China(?) back in 2010 or 2011 that was only reported in The Independent wrt the petro dollar?

nope-1004's picture

Falling oil prices I believe are a direct result of the heavy deflationary pressures on the USD.  Oil being priced in USD for the last 40 years has given .gov the freedom to commit all kinds of financial fraud, sanctions, and malfeasance.

A falling oil price goes hand in hand with a move away from USD, as we are now seeing and as we saw in the shock of 2008.  The article makes total sense.

 

Keyser's picture

You ever heard of supply and demand? 

Bay of Pigs's picture

I can't speak for oil, but "supply and demand" has been completely irrelevant for the gold and silver markets for over 3 years now.

 

El Hosel's picture

This move down in oil has been as relentless as the move up in US stocks, "orderley and efficient Markets" via Financial Engineering.

indygo55's picture

'I can't speak for oil",

Waddya mean? There's been a huge demand for paper gold and silver. Every morning at like 2 am they sell tons of it. Wait,,, oh neber mind.

 

Sarc off


Syrin's picture

EXACTLY !!   Who in the hell is buying this shit ?!?!? 

El Hosel's picture

.... The other "relic" , supply and demand. 

A few months ago oil was $105, I guess that means oil demand is dropping 7% a month or so. Peak Oil to Free Oil in one year at this rate.

mrdenis's picture

NO it's means the fed just isn't throwing money in that direction ...

conscious being's picture

That and demand for oil priced in $s is dropping. Other deals have been done.

Jonathan Equine Phallus's picture
Jonathan Equine Phallus (not verified) Keyser Nov 27, 2014 4:30 PM

what, in the fuck, does 'supply and demand' have to do with the price of oil?

El Vaquero's picture

<_< 

>_>

 

You got me on that one.

just-my-opinion's picture

Well...China has cities that sit empty....Why did they build them....To CooK The Books

American CEO's are experts at this

 

No suppy and demand there

db51's picture

Commodities?   Hope to fuck the corn and soybean market doesn't tank any further...we've already lost 50% since last year this time.    I'm screwed.

americanspirit's picture

Corn & Soybean? GMO too no doubt. Maybe when farmers begin actually growing food again things will turn around. Meanwhile, Monsanto is one happy bunch of crazy evil fuckers.

db51's picture

Fuck Monsanto.....We grow all non-gmo corn and soybeans.   Funny thing though...when we deliver our non-gmo.....they allow for 5% contamination....so basically every non-gmo seed variety has been polluted.   

Greenskeeper_Carl's picture

not trying to be an asshole, but when you are messing around with something as manipulated and govt controlled as corn, expet shit to happen. Ever since they started mandating corn alcohol in gasoline, and instituting sugar tariffs to protect a handful of wealthy cane growers, thereby encouraging/forcing people to use high fructose corn syrup instead of sugar, and the beef industry using corn instead of the natural food of cows(grass), people have jumped on the corn bandwagon, diverting land from other productive crops in order to feed off the govt subsidized teat. It was bound to happen sometime, since when you subsidize something, you get a whole lot moar of it.

 

Not saying you are necessarily one of those people, and I didn't downvote you. Sorry you are having troubles, non big agri farmers like you are getting scarce these days

onthesquare's picture

The chemists can make everything from corn

WillyGroper's picture

ascorbic acid blew me away.

Sutton's picture

John,
What kind of trading do you see? And why?
Thanks

Escrava Isaura's picture

 

 

CrazyCooter,

Accordingly to Rickards SDR will become the next reserve currency and US will debase the dollar against gold and tax gold profit very high.

And the US will blame the SDR (IMF) for the dollar collapse.

Anyway, you might appreciate this post as well. It’s one of my favorites:

Thermodynamics for Economists by Mark B Cunnington that goes by the name of Null Hypothesis, at “The Oil Drum”.

If you walk outside you’ll see birds chirping, trees whispering…., except we have nicer looking cars…

What’s so different about today that provokes Chicken Littles like me to scream that the world is about to end?

The answer to this is that our entire financial system, and its history going back at least 100 years, has been predicated on, and driven by, perpetual economic growth. That is what provides value to money. Money is literally created out of future debt….

People historically bought those bonds because they were reasonably confident that the economy would grow at a rate roughly equal to the bond coupon,

But in 1970 the US hit Peak Oil. As a result, its economy should have begun declining because it couldn’t grow anymore. But it didn’t decline, at least to the degree one would have expected. Why not? Because there was a fundamental change to the monetary system. In 1971, the US defaulted on its gold convertibility and the dollar became a fully debt backed fiat currency.

Those systems are dependent on perpetual exponential growth and they invariably, 100% of the time, blow up in hyperinflation. How did the US avoid that catastrophe? It (militarily) enforced the dollar as the world’s reserve currency, that’s how, which extended the US empire around the world and forced other countries to sell their resources (oil and manufactured gizmos) to the US in exchange for pieces of paper. That was a fundamental system change in 1971.

In order to keep the bond vigilantes at bay and prevent a runaway monetary collapse, in 1982 the Fed increased interest rates to about 20%. This “destroyed” the economy, but the alternative was hyperinflation which would have destroyed it as well. Back then, the economy could weather those high interest rates without completely collapsing because it wasn’t over-leveraged. And more importantly, the US still retained the world’s reserve currency, so it could run a perpetual trade deficit and CONTINUE GROWING – using other countries’ resources, who hadn’t yet hit Peak.

We are now looking at another imminent system change.

There is now no “productive” monetary asset left that can provide a positive real rate of return, absent central bank manipulation of select markets, at the expense of others.

We’re at Peak Oil. Duh! How can anyone seriously expect a consistent rate of return on their investments when the real world upon which those investments are valued isn’t growing?

Anyone who casually looks out the window and concludes that what is going in society now resembles anything close to historical norms is in for a big surprise.

The system WILL end, and it will not end with a whimper.

All this talk about whether total global oil production is up or down a …. it’s all just statistical noise.

The world will be on its downward spiral. And the naysayers taunting the doomers will mysteriously vanish into the woodwork, just like they always do after every ponzi scheme crashes.

 

http://markbc.net/doomer-economic-commentary/thermodynamics-for-economists/

 

assistedliving's picture

EI, perpetual economic growth?  notice how the population grows?  anyway, more like ebb and flow; mostly flow.  Or you prefer a managed economy?  managed by.....EI and co.?  your doom and gloom naysaying is taunted because the world has never witnessed 'growth' like the past 30 years, even 100 years.  because

it passed you by means it is somewhere else.  sorry for that

Escrava Isaura's picture

 

 

I am sorry. I have NO idea what you're talking about.

But, from where I stand, it looks like you got intoxicated by:

a) The Gospel of Prosperity by the churches

b) Indoctrinating Obedience by the education

c) Irrational Exuberance by the clueless friends

d) Positive Psychology and forget the facts by our academia

e) Pseudo-Science of Happiness by our PhD’s

 

“Moral courage doesn't reside in ‘doing good’ so much as in fighting the bad. My moral obligation is to destroy the economic establishment, and I will” -- Nassim Taleb

 

assistedliving's picture

a) thru e)  maybe it's academic; you stopped short at "F".

pray tell Taleb(an), replace it with what?

 

TheReplacement's picture

There have been several significant population booms in human history.  They usually, well never so far, last forever.  Depopulation will happen.  Live it up son.  It ain't gonna last.

CrazyCooter's picture

Rickards is a good thinker and is definately "plugged in" so to speak, but I am not sure anyone can really know how this pans out. I don't see how transition can be orderly - at all.

Any move to a system which requires consumers to approximately pay producers for goods (i.e. produce in kind value in exchange) will see hellacious deflation and standard of living collapses. What do you think happens to the entire block of elderly voters in the US when their sustance HAS TO BE PAID FOR IN KIND. Then there is the FSA army to deal with.

If SDR is the global currency, then who gets the cream and who gets the cob? In the past models, one nation tended to dominate the others, until they rotted from within and were replaced by a younger/stronger nation so to speak. The SDR model is business as usual but with everyone agreeing to play nice at the elite level. I don't see that happening when there is growing unrest in all involved nations as deflation eats away at society.

When the petro-dollar slowly rolls over, in an increasingly energy constrained environment, trade is going to become very complicated and food will quickly rival oil in strategic importance.

Said differently, sometimes I like to tell people, when they ask me how I am doing, that "I have three hots, a flushing pot, and a warm cot. Life is good!" What they often don't realize is I am serious. :-)

Regards,

Cooter

Escrava Isaura's picture

 

 

CrazyCooter

I have a bleak view of humanity once the low IQ and uninformed masses realized it’s over.

 

Here’s the list that I find compelling:

1. Financial Collapse

What Collapses: Banks, currencies, the value of savings & assets

Signs of Collapse: Bank failures/rescues, stock/housing market collapses

Cultures at this Stage: Iceland during 2008 crisis

Coping/Resilience Mechanism: Eliminating and repudiating debts, using community currencies, let the banks fail

 

2. Commercial Collapse

What Collapses: Credit availability, trade, businesses, tax revenues, industrial food & energy systems

Signs of Collapse: Corporations become criminal, rampant corruption, regulatory mechanisms fail, trade and supply chains seize up

Cultures at this Stage: Russia after collapse of USSR.

Coping/Resilience Mechanism: building self-sufficient communities, local self-employment and essential supplies, creating a Gift/Sharing Economy

 

3. Political Collapse

What Collapses: Law & order, regulatory enforcement, safety nets, power grid & other infrastructure (including health, education, water and emergency response systems and the Internet), nation states

Signs of Collapse: Citizen unrest, surveillance society, scapegoating, rise in totalitarian governments, war and despotism

Cultures at this Stage: Afghanistan & Pakistan

Coping/Resilience Mechanism: creating local, direct (non-representative) democratic or egalitarian anarchistic institutions

 

4.-5. Social Collapse and the Disintegration of Humanity

What Collapses: Community: social institutions, trust, social cohesion, faith, cooperation; and then Humanity, kindness and compassion

Signs of Collapse: Permanent refugee cultures, disintegration of health care and waste management, endemic diseases, alienation, anomie, inurement, fighting violence with violence, hero worship, personal disintegration

Cultures at this Stage: Ik tribe of E. Africa

Coping/Resilience Mechanism: few or none

 

 

http://howtosavetheworld.ca/2013/07/05/will-the-collapse-of-civilization-begin-with-global-corporatist-totalitarianism/

 

 

assistedliving's picture

agree CC.  but I ask, who is the breadbasket of the world?  largest oil producer? center of finance?  place EVERYONE wants to

come?  Our problem is consumption, as in OVER.  Productivity, innovation, technology, creativity, higher education and arts; its here.  I like to tell people,

it may seem like we're going down, but it's more that others are going up faster. Disruptive no doubt but more doing well is more doing well. 

Escrava Isaura's picture

 

 

And long on Bibles.

By Boomer ll: “Significant numbers of Americans think Jesus is coming back and the worse it gets, the more the signs point to him coming soon. So long-term planning doesn’t exist for some folks.”

 

http://peakoilbarrel.com/bakken-sweet-spots-petering/comment-page-1/#comment-455900

 

onthesquare's picture

Been watching what products and services are completely bogus.  They will be the first to fall.  The amount of surplus crap out there is at an all time high.  Stuff made by the millions with limited use or does not live up to the claims now sits in dollar stores collecting dust.

The number of womens clothing stores in malls is outright rediculous and lets not forget the multi billion dollar crap comming out of holly wood.

 

Days are numbered.

emersonreturn's picture

onthesquare,

 

re: let's not forget the million dollar crap coming out of hollywood...

 

my grandfather lived through 2 depressions, 2 wars, and he said when it gets dark, desperate and poor, always invest in ways to help people escape and use the money you'll make to invest in land, metals and buy the beautiful objects people will be literally giving away.  he owned a pub, from there he bought a hotel which had a pub as well as a lounge.  he then bought farmland, cattle, hogs, turkeys, peasants.  he never invested in film but he always viewed theatre, film, and sports as just another way to sell alcohol, the drug of so many.

 

 

db51's picture

W T F????  I'm interested to know how he was buying the "peasants?"

bitterwolf's picture

opportuity everywhere...you know the old saw "when there is blood in the streets....RELOAD."

Vesuvius's picture

Napoleon used to attack on holidays.  OPEC probably didn't pick US's Thanksgiving day at random. Both the US shale industry and I guess the petrodollar have been targeted.  I wonder what US response OPEC was afraid of if they haden't picked Thanksgiving?  I would not be surprised if Saudi A. ends up being the next Iraq. 

onthesquare's picture

look up the true origin of thankgiving.  To thank God for helping us slaughter the Indians; men, women and children.  Holidays during Napoleon's time were all religious. 

just saying

DaddyO's picture

Another product of the progressive education system?

DaddyO

Debeachesand Jerseyshores's picture

"That means everyone tightens belts all the way around".

 

Spot on Cooter....