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The Aftermath Of The Great 2014 Oil Crash "A Textbook Macroeconomic Shock"
Not a day passes without pundits on either side of the debate, eager to make their case that the acute, nearly 50% plunge in the price of crude, swear up and down their preferred economic ideology of choice that said plunge is [bullish|bearish] for the economy. The reality is that the true impact of the great oil crash of 2014 will not be revealed for at least several months, however for those who can't afford to wait, or simply lack the patience, here is perhaps the most comprehensive view of the pros and cons of what has now been dubbed a "textbook macroeconomic shock" by Deutsche Bank.
From Deutsche Bank's 2015 Credit Outlook titled "Plate Spinning"
The Great 2014 Oil Shock - Aftermath
The fall in the price of oil – down more than 40% since June – is a textbook macroeconomic “shock”. Stripping it down to its most fundamental level, a fall in the price of oil predistributes real income from oil producers to oil consumers. Money oil consumers would have exchanged with oil producers for the stuff, can instead be put towards other purchases or savings. At the global level it means less spent on oil imports for oil importing nations and less income from oil exports for oil exporting nations. To put some rough numbers around this, US average net imports of oil and the like has averaged 5.2m barrels per day in 2014, thus the fall in the oil price by $43 since late June is saving the US economy about $224m a day on its net oil transactions and costing its oil trade partners the same amount. This is after accounting for the dramatic fall in US net oil imports driven in part by the country’s shale boom.
Therefore if oil prices stay where they currently are this appears to be a meaningful headwind for the big oil consuming nations. The biggest net oil importers in 2013 were (1) the US, (2) China, (3) Japan and (4) India. Major exporters will suffer. Probably the most prominent current example of an economy that will struggle to cope with the fall in the oil price is Russia, which in 2013 was the world’s second largest net exporter of oil. As we’ve already discussed, estimates suggest that at oil prices below $90 the Russian economy will go into recession and DB estimates the government will fail to balance its budget at $100 (Figure 133). At current levels none of the major oil exporters will be able to balance their budgets next year.
Overall, most estimates suggest that a fall in the oil price is a net positive for the total world economy. According to the IMF’s Tom Helbling, “a 10% change in the oil price is associated with around a 0.2% change in global GDP” (The Economist) as oil consumers are greater spend-thrifts than oil producers. Given those estimates the current fall of more than 40% should add about +0.8% to global GDP growth.
With so much of the global growth story resting on US shoulders next year the fall in the price of oil should help, although not as much as it used to given the USA’s shale boom. The EU should also gain given its $500bn of energy imports in 2013. However the drop in the price of oil might prove a mixed blessing given that sharp drops in the oil price will weigh on inflation (Figure 134) and another negative headwind to inflation (in any form) is not something the euro area really needs or wants currently with CPI running at just +0.4% YoY. On the other hand the drop in inflation pressures should be a boon for a number of EM economies whose central banks may otherwise have had to hike rates in the face of rising inflation even as their growth rates remained tepid.
It’s also important to remember that whilst oil is an important global commodity it is rare for it alone to drive global economic outcomes. The halving of global oil prices in 2008 didn’t prevent many of the world’s oil importing economies from suffering severe recessions and as Figure 135 shows there is no easy nor automatic relationship between falling oil prices and rising US growth. The environment within which the oil price change occurs is important. Indeed if the current drop in the price of oil is being driven by expectations of falling demand driven by expectations of a slowdown in global growth it’s possible that the drop in the oil price is at best going to partially cushion the global economy from a slowdown rather then drive it to higher growth rates.
Also importantly for investors, falling oil prices will not affect all areas of economies equally, even in those economies that should benefit at an aggregate level. As our US credit strategy team wrote recently, energy companies make up the largest single sector component of the US HY market at 16% (US HY DM Index) and so the falling oil price may prove a negative for the US HY credit market. Our US team added that if the WTI price fell to $60/bbl this would push the whole US HY energy sector into distress, with around 1/3rd of US energy Bs/CCCs forced to restructure, implying a 15% default rate for overall US HY energy which would contribute 2.5% to the broad US HY default rate. This could be a sizeable enough shock to cause concern throughout the rest of the US HY market.
There is no doubt that the fall in the price of oil in 2014 has been a significant economic shock. Most estimates suggest that this should add to global growth, weigh on global inflation and most likely have varied but oil-specific asset price implications (EM oil producing nations and US HY weakness stand out); however it is likely that growth tailwinds from this year’s fall in oil prices will not be the main story for investors in 2015.
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I think a doubling of oil prices would be a textbook macroeconomic shock, and a real pain in the patootie.
Nobody Really Wants to Be Free – Because Freedom Brings Responsibility
http://www.philiacband.com/propaganda.html
probably chess was invented in India but sure Putin knows how to play.
I see a collapse of US emerging shale oil industry and social unrest in Saudia.
I thought chess was an Arab invention.
chess came out of ancient Persia (Iran)
didn't read a mention of the derivative time bombs tied to this falling market. there's the real story.
Naw, in 'Arab chess'... the pawns get little explosive vests while the king and queen from both sides never even get on the board.
Aftermath? Shock? LOL. Like this is even over.
LOL.
It just started really.
It was.
Shah-I-mat = the king is dead
Shah-I-mat= Checkmate
The author has confussed the meaning of the word "headwind"
It is evident nobody knows wtf is going on
My Turbo charged V8 says thank you.
I will have a lot more discretionary income to spend on Hookers and Blow now, and since this is now included in GDP figures in many countries worldwide, all I can say is 'your welcome', just doing my bit for the world economy.
Time to buy that Dodge Challenger 5.7-Liter V8 HEMI! Hell yeah!
I agree quintago. I have read nothing convincing that explains otherwise.
I think Putin has played amazing chess (in geo-political terms) and forced this, so they are going after him lock, stock, and barrel. I expect Ukraine to go hot pretty soon.
I think this is an attack on "financialization" more than anything else. I think the West needs an engineered blow up because they can't get the MENA war they have been jockeying for for years now.
Something has to give. All hell will break loose, but this will just be another power grab opportunity. Cleanest dirty shirt if you will with the power elite.
Because of the blow up at home, losses are going to be pushed onto the retired class. Biggest US voting block by far. This will be a political play, but it will take time. I think the gambit is they send their grand kids off to global war so they can keep their cat food.
But, not to man-crush or anything, but I think Putin is going to sling tact nukes early on and send the US scurrying for cover because they don't really have the support at home for a full on nuke fest.
I hope I am wrong ... and have been for years thinking this shit will go tits up ...
Regards,
Cooter
It is all about obfuscation. The financial asset ponzi is up against fundamental system level and distributional constraints. They need cover for the unwind.
I was reading some Lewis Mumford today. He noted that since capitalism inevitably trends toward overproduction, war -- and it's subsequent reinstatement of scarcity due to widespread destruction -- is not only inevitable, but from the perspective of the captialist class, desireable. Not sure how that will play out, since they do like cheap labor. So that doesn't really fly logically with me. Interesting to think about though. Mumford is great.
"capitalism inevitably trends toward overproduction, war -- and it's subsequent reinstatement of scarcity due to widespread destruction -- is not only inevitable, but from the perspective of the captialist class, desireable"
No.
We don't have capitalism. Not even close. Free markets don't inevitably lead to war. Quite the opposite.
This Mumford guy you worship seems to confuse fascism with free markets. Probably on purpose.
Exactly right, those great central planning capitalists of history - Mao, Pol Pot and Stalin - certainly would know a thing or two about "overproduction, war and it's subsequent reinstatement of scarcity due to widespread destruction" wouldn't they?...lol.
And from their central planning step-brothers (the crony-socialist fascists) it seems we have a new word and concept being introduced into the common lexicon, to go along with rehypothecation:
"Stripping it down to its most fundamental level, a fall in the price of oil predistributes real income from oil producers to oil consumers."
You see because that income in your pocket dear oil consumer, that which you worked for and was taxed so heavilly out the wazoo for, leaving you some centrally planned, predetermined remainder to decide what to do with, was MEANT TO GO TO oil producers dammit!!!
It never ceases to amaze me ;-)
Two solid comments in a row. I loved the "predistribution" meme as well. Good god, keynsian gibberish at its' best. On to Womb's statement about capitalism, many people fail to notice how the Elites use the term for intellectual cover. Capitalism is like a pendulum, it moves back and forth over a changing equilibrium point based on production growth. Self correcting to rein in misallocations. The tendency to war has nothing to do with capitalism ( I think there was warfare long before), but the behavior of Elites.
What DB fails to discuss adequately is the ramifications on HY credit, which benefitted from the increased liquidity from CB profundity and how it will affect share prices, which are the collateral for all those bonds. Further, what is the effect on derivitives?
Which stems from too much liquidity searching for value in a system (not a market) which has resorted to financialization, rather than useful production of goods and services. This is destroying the price discovery process, thus exposing false asset values whenever demand deteriorates. As market forces begin to assert themselves, if they are allowed to by the CB's, bond and equity values will be slashed.
So, to print or not to print? Or obscure the revelation with armed conflict resulting in further destruction of productive capabilities for the purpose of consolidating industries on the cheap(with a little culling in the process)?
Kind of gets me all misty eyed for anarchy...
And note how the statist Deutsche Bank chooses to describe what it foresee's among the nations of the world, the words it uses.
It is described as "income" to a nation-state not revenue, as if nations are a living breathing organism. Perhaps too fine a point on my part and some statist will no doubt come along and point out the "interchangeability" of the word by current definition and understanding BUT that is exactly my point.
Revenuers were not called Incomers for a reason...lol.
This continuing bastardization of language is akin to calling taxpayers or welfare recipients, "customers" ;-)
No.
We don't have capitalism. Not even close. Free markets don't inevitably lead to war. Quite the opposite.
This Mumford guy you worship seems to confuse fascism with free markets. Probably on purpose.
My question for all the captain save-a-capitalisms, why does what is proposed on paper for capitalism never fare well in our world? If the observation was made that the overproduction->war->scarcity cycle is something found in virtually every meaningful world economy, then shouldn't this be a glaring indicator about the extent to which we can dictate human behavior through implementation of a set of laws, culminating in an economic system? If capitalism is something so contrary to human nature that it can never be properly implemented, then why champion it? The lengths rational actors will go to avoid the normalization of profit renders capitalism functionally impossible. If socialism is a crisis of marginal productivity, then capitalism is a crisis of profit.
PS, I'll also go out on a limb and say that it's an argument born purely of convenience to claim that capitalism simply has never been tried... we get that quite a bit at ZH and it seems patently ridiculous.
First, the term capitalism describes a form of market activity which allows for price discovery in an efficient manner. Self correcting through the magic of human greed. Second, the reason it doesn't exist is a simple one: it retains competition as a hallmark and the Elites hate competition. Therefore, it follows the Elites use the machanics of capitalism when it favors them and intervene in the markets when it doesn't, thus rendering capitalism impotent, but a convenient scapegoat.
The cycle of overproduction-war-scarcity has zero to do with capitalism and everything to do with the maintenance of the Elite class. These methods of control enhanced through propaganda has always been successful in the control of us serfs. You have no need to change something which works so superbly. To blame the systemic abuse of the law (which is why it was created in the first place) with the mechanics of capitalism is a serious error in reasoning.
More important, the dependency on "isms" is a clue to the tools used by the Elites to confuse and confound us. An economy will function with zero rules and interventions of any kind, whether we term it capitalism is meaningless. The production of goods and services for the purpose of profit enhanced through exchange via widely acceptable money substitutes requires no school of philosophy nor legal structure. The use of credit and interest will develop and risk will come into being as a control mechanism. We need no school to explain it.
To champion any system usually results from possible personal gain which can not be attributed to pure production. It is a scam. Thus, let us consider the benefits of NO system (anarchy), personal responsibility and thus personal loss or gain, the value of hard work and the reward of ingenuity in free trade.
Well said. I am getting a little hungry for some anarchy myself. Good, Bad or Ugly, at least it is organic and honest. I have had quite enough of whatever "ism" this collectivist shit pile might be called being forced down my throat at the end of a gun.
Personal responsibility will not return to Washington until there are a few million pitchforks and torches on K street and Pennsylvania Ave. maybe accompanied by some public hangings ala Mussolini, some real rarbaric retribution to put the fear of God in these sociopathic fuckers.
First, the term capitalism describes a form of market activity which allows for price discovery in an efficient manner. Self correcting through the magic of human greed.
Capitalism is not self correcting. It necessarily relies upon a third party, to remain neutral, in regulating the market and protecting property rights. Otherwise, capitalism looks no different than a lawless area of subsaharan africa (or were you suggesting that this actually is what capitalism is supposed to look like? - don't be the last guy without a gun to the "humanitarian aid" parachute drop!). The law of competition is consolidation of power. The notion that power cannot consolidate due to competition has been proven wrong for at least a few millennia. Competition necessarily entails consolidation, consolidation necessarily entails corruption, corruption necessarily entails a subjective and tainted regulator. As a result, the introduction of a regulator cracks the foundation of capitalism and, further, explains why it is seldom seen for more than a glimpse (and often very quickly resembles every other form of economy).
If boom and bust is your definition of self correcting, then every economic system fits that bill...
[if capitalism was self correcting, then we couldn't possible be entertaining this discussion, because capitalism would have corrected itself long ago...]
Second, the reason it doesn't exist is a simple one: it retains competition as a hallmark and the Elites hate competition. Therefore, it follows the Elites use the machanics of capitalism when it favors them and intervene in the markets when it doesn't, thus rendering capitalism impotent, but a convenient scapegoat.
Again, nonsense. It has nothing to do with some all powerful, elite ghosts... It has everything to do with rudimentary human nature, down to the last man, woman, or child. If you want to make an accurate thesis, it is that HUMANS (not merely the elite of us) hate competition. As a result, EVERYONE participates in the dismantling of competition. As a rational actor, competition is our arch nemesis. This is why basic economic models fail... they have no concept of the lengths to which we will go to avoid the normalization of profit.
If your mom and pop shop is getting eaten alive by the big box store that opened up down the street, aren't you going to petition your legislature for law changes? Maybe knock on doors in the local community and plead your case? Would you want your boss to sit you in a room with another guy and tell you the new guy is going to be competing against you for your job and the best man will win, despite your years of loyalty and spectacular work for the company? How would that make you feel? What if your wife told you that you weren't quite getting the job done in the sack and now she'd like to troll the local night clubs for a better suitor? If your daughter said she'd rather someone else teach her how to tie her shoes, ride a bike, or play catch?
Again, if you can acknowledge that this cycle appears the same for virtually every economic system (and predated many of the modern economic systems), then why do you attribute it solely to some elite group of people? Have these folks found the fountain of youth and have been controlling everything for thousands of years? This gets back to the basic human need to pretend there is a higher power than ourselves... conjuring the elite is no different than conjuring the spaghetti monster. Even if they have contrary interests, at least we know someone is steering the ship, as the devil we know is better than the one we don't.
The cycle of overproduction-war-scarcity has zero to do with capitalism and everything to do with the maintenance of the Elite class. These methods of control enhanced through propaganda has always been successful in the control of us serfs. You have no need to change something which works so superbly. To blame the systemic abuse of the law (which is why it was created in the first place) with the mechanics of capitalism is a serious error in reasoning.
No argument as to who it benefits the most. However, no one argued that it is the mechanics of capitalism in particular that leads to the cycle... the cycle predated capitalism and will post date capitalism as well (but don't have a heart attack on me when your god dies).
More important, the dependency on "isms" is a clue to the tools used by the Elites to confuse and confound us. An economy will function with zero rules and interventions of any kind, whether we term it capitalism is meaningless. The production of goods and services for the purpose of profit enhanced through exchange via widely acceptable money substitutes requires no school of philosophy nor legal structure. The use of credit and interest will develop and risk will come into being as a control mechanism. We need no school to explain it.
No doubt about it that humans will organize to form an economy one way or another. If you can acknowledge this much, then why is it so hard to make one leap further and say that this is how we interact regardless of the laws imposed? If we're already bestowed with our own personal notion of how to interact with one another, then why is this not our foremost guide? I will concede that the law can have a marginal impact upon human interaction, however I think this would be akin to arguing the exception rather than the rule.
To champion any system usually results from possible personal gain which can not be attributed to pure production. It is a scam. Thus, let us consider the benefits of NO system (anarchy), personal responsibility and thus personal loss or gain, the value of hard work and the reward of ingenuity in free trade.
That's great and all, but there are quite a few places in the world that have no system... I personally wouldn't want to live in any of them (nor even chance a visit), but I guess if you're desperate to change then it's a possibility. However, I cannot fathom what it would be in these systems that protects your property rights as a productive member of society. I'll also posit that ingenuity has little fertilizer in a land where might can make right. Again, this seems to be more of a religion to you than a scientific exercise. Why do you think society developed as it did? What gave rise to the need to create it?
Please provide a citation whereby capitalism requires a regulation mechanism? Your opinion has no value here. Further, property rights have nothing to do with capitalism. Capitalism encourages the use of capital to spur production through investment for a profit. This is ALL. The law of competition? Please cite from where this exists. Competition by definition can not be consolidated as it thenceaes to be competition, but monopoly. Boom and bst has nothing to do with my definition nor is it an aspect of capitalism. It is a function of itervention and State protection of moneyed interests. What world do you live in?
Only State players are capable of "dismantling" competition through law and regulation. It was John D Rockefeler who as famous for his statement on hating competition- was he not moneyed elite? Everyday people creating legislation and pushing it through Congress via bribes (ie CITIbank in the CRomnibus) is the real fantasy here. Further, how can I acknowledge the system is the same for all, when price discovery can only happen in a market free of interference, ie capitalism? You may like to play fas and loose with the definitions, but I don't.
Funny, the person you were responding to did. He blamed the mechanics of capitalism specifically.
No, humans will engage in exchange and trade. This is very different from the concept of an economy with rules and regulation. Worse, you seem to mnimize the effects of laws, as if they are a passing trifle. When in fact, they dictate winners and losers as well as wrk to limit markets and participation.
Where are these places which have no system? Please cite one of any signficance. Now, I will agree hat ingeuity has little fertilizer in a land where might makes right, but we were discussing capitalism. As for religion, there has been nothing scientific in your analysis- no facts, figures, citations nor expositions on policy. You are spreading the religion of propaganda- we call it manure around these parts. I have merely presented the explanation you asked for while receiving a lot of verbiage without content in return.
We have very little information as to how societies developed. We make assumptions regarding security and division of labor, but there is just as much evidence to show the opposite. If you are referring to modern totalitarianism, you might seek to learn the methods of the zionists and the talmud, the black nobility, the British aristocracy, The Illuminati,the Catholic Church and other organiztions under whom's organization we can see history of slavery for the benefit of a selected group. If you wish to put on a tinfoil hat, you might research the "feast of the beast", Ancient egyptology, hinduism and the use of spirit powers (we might call them aliens).
Please provide a citation whereby capitalism requires a regulation mechanism? Your opinion has no value here. Further, property rights have nothing to do with capitalism. Capitalism encourages the use of capital to spur production through investment for a profit. This is ALL. The law of competition? Please cite from where this exists. Competition by definition can not be consolidated as it thenceaes to be competition, but monopoly. Boom and bst has nothing to do with my definition nor is it an aspect of capitalism. It is a function of itervention and State protection of moneyed interests. What world do you live in?
I live in the world where capitalism necessarily requires a neutral, third-party regulator to ensure that competition actually occurs, otherwise rational actors will seek to avoid competition. Competition cannot be consolidated, but that's not what was said... Power is consolidated through competition... Power that soon corrupts.
Further, booms and busts have occurred since the dawn of civilization... whether this is from overuse of natural resources by various tribes or from cheap credit eventually coming home to roost, it has always happened... I might entertain the notion that the macro impact is more dramatic with governmental intervention, but I'm not going to make your argument for you.
Only State players are capable of "dismantling" competition through law and regulation. It was John D Rockefeler who as famous for his statement on hating competition- was he not moneyed elite? Everyday people creating legislation and pushing it through Congress via bribes (ie CITIbank in the CRomnibus) is the real fantasy here. Further, how can I acknowledge the system is the same for all, when price discovery can only happen in a market free of interference, ie capitalism? You may like to play fas and loose with the definitions, but I don't.
First, whenever you have to try and convince someone that you're not playing fast or loose with definitions, it's a definite sign of the opposite. In fact, I fail to see how your definition of capitalism is any different than anarchy.
Second, the system is not the same for all. The system is never the same for all, nor will it be... this is the same type of wishful thinking that leads to socialism... some type of desperate attempt to even out the masses (at least on paper). Capitalism, and especially the anarchy you're advocating, can be painfully unforgiving and never seek to offer a level playing field. Again, this is the type of notion that's great on paper, but once met with real world forces, crumbles to the pressure.
Third, I gave you real world examples of how every day people hate competition. The both of us hate competition. For your retort, you paraphrase rockefeler? Really? How about addressing the fundamental nature of humans... then we'll get somewhere.
No, humans will engage in exchange and trade. This is very different from the concept of an economy with rules and regulation. Worse, you seem to mnimize the effects of laws, as if they are a passing trifle. When in fact, they dictate winners and losers as well as wrk to limit markets and participation.
Which is it? Do humans naturally engage in trade or do they bow to the demands of government? It is undeniable at this juncture that deterrence is not a justification for criminal law (retribution, among others, now carry that torch)... In a world with legal systems so complicated that lawyers and scholars cannot know it, do you really expect the remainder of society to use the law (whatever it may be) as a guide post? Which is more likely, that we resort to our internal compass or desperately seek guidance from the law? Again, you're in a logical vise, if the powerful elite create laws so onerous that they cannot be tolerated, then what do you think people do? Sit on their hands? I've got a bridge to sell you.
I'll put it another way. It is not the law that decides winners and losers. Those are determined before the laws are written, the winners just dictate the terms. Your cause and effect is backwards. Now, without making your head explode, please try to contemplate how those folks got into a position to write the law (hint, it involves competition).
Further, why do you believe that legislation is any different than the private system that would otherwise be in place? You've heard of the company store, right? Organized crime?
Where are these places which have no system? Please cite one of any signficance.
Touchdown motherfucker. Thread over... you've made my point.
So, no citation showing capitalism requires regulation, just your opinion, of "living in a world" though capitalism is not practiced in this same world? You do understand we are talking about capitalism and not your interpretation of the world around you?
"Competition necessarily entails consolidation"- you did say this, no? Your words, but I understand the need to lie when ideas become troublesome to refute.
Actually, if you read "5000 years of Debt" you would realize booms and busts have not happened since the dawn of civilization, whatever relevance your statement has. It is the cause of booms and busts which are at question and you are unable to link them to capitalism.
Capitalism is an economic theory, whereas anarchy is a political theory. Even if we decide to group them together, why is there a problem? Because you think anarchy is bad? For someone who says they value scientific inquiry, you seem to want to depend on unsupported opinions an awful lot.
Again you want to disparage capitalism because it doesn't fit your value judgements. No one said capitalism is wonderful and there will be no winners and losers, it merely describes a system where people can not game it through influence and intervention. You are confusing the crony captalism of real life (perhaps even communism) with the subject at hand, which DOES NOT EXIST.
People do not have to like competition for it to have value in an economic system. I like competition, nature likes competition, evolution likes competition, but competition is hard. It gives preference to the best products and that benefits everyone in the totality of a system.
If you wish to bring up the "fundamental nature of man", it is a different subject requiring definition. Not that definitions are your strong point.
As for engaging in trade, you have provided a false choice: they do both, especially if the State's coercion is effective. Where does deterrence and criminal law come in? Are you ADHD? Actually, the people seem to do exactly that in the face of onerous laws or do you have an example? There is no logical vise, except the one you've created for yourself by going off topic, incapable of understanding definitions and a failure to provide any citations or proof for your arguments.
What private system? Now, you are on a whole other subject. Capitalism, in its' pure form, has NO SYSTEM. How does a "touchdown" make your point? The discussion regards capitalism. It doesn't have to exist, but if you are going to criticize it by alluding to some example, you will need to provide the example.
I suggest you try "Don Quixote", As tilting at windmills seems to be your stock in trade.
So, no citation showing capitalism requires regulation, just your opinion, of "living in a world" though capitalism is not practiced in this same world? You do understand we are talking about capitalism and not your interpretation of the world around you?
Well, you could have laissez-faire, but then again, it begs the question - if capitalism exists in the world, then it's an abject failure; if capitalism doesn't exist in the world (or hasn't existed), then why the hell not? What differentiates capitalism from anarchy is a neutral regulator... the former having the humility to see how the latter devolves (think somali pirates). The issue is fairly simple, anarchy is much the same as democracy, two wolves and a sheep deciding who is for dinner. Without collective bargaining of the sheep, represented by a central authority, the result is always the same. The end is the same for the sheep either way, but at least there are some periods of bargaining/fighting in between.
"Competition necessarily entails consolidation"- you did say this, no? Your words, but I understand the need to lie when ideas become troublesome to refute.
So from the quote, it does not specifically state what consolidation means... so, after I have explained it, you're telling me I'm a liar? You're not actually trying to engage in a discussion...
Actually, if you read "5000 years of Debt" you would realize booms and busts have not happened since the dawn of civilization, whatever relevance your statement has. It is the cause of booms and busts which are at question and you are unable to link them to capitalism.
Why do I need to link them to capitalism in particular, when they're naturally occurring for all types of human organization? Hell, I would hope that you could even acknowledge the little issue markets have with externalities... We're not just talking about credit booms and busts, you realize there are perfectly natural booms and busts as well? While I must admit I have yet to read it (and have no plan on reading it), I sincerely doubt it chronicles the entirety of human civilization... I'll leave it at humans are not particularly well suited at maintaining stasis ourselves...
Capitalism is an economic theory, whereas anarchy is a political theory. Even if we decide to group them together, why is there a problem? Because you think anarchy is bad? For someone who says they value scientific inquiry, you seem to want to depend on unsupported opinions an awful lot.
Have you heard of anarcho capitalism? How is it that you can actually have a free market without a corresponding political system that allows for such freedom? [aside from the fact that political systems are always beholden to the economy]. I don't think anarchy is bad per se, however I do not believe it is any sort of solution in and of itself. The problems it presents are exactly why we organized differently...
Again you want to disparage capitalism because it doesn't fit your value judgements. No one said capitalism is wonderful and there will be no winners and losers, it merely describes a system where people can not game it through influence and intervention. You are confusing the crony captalism of real life (perhaps even communism) with the subject at hand, which DOES NOT EXIST.
News flash, every time capitalism is attempted to be implemented, it ends the same way. To think that a system exists whereby no one can game it, is not only incredibly naive, but patently idiotic. I agree that this would be a noble goal for any system, but to believe that it exists in the wild is... against all observation. If capitalism, as you define it, does not exist in the world, then I ask why? Is it that the notion has never been attempted or, rather, that it fails miserably every trial?
People do not have to like competition for it to have value in an economic system. I like competition, nature likes competition, evolution likes competition, but competition is hard. It gives preference to the best products and that benefits everyone in the totality of a system.
In the jungle, there is a hierarchy of birth... nature does not value the same type of competition that you're advocating. In nature, many animals have no natural predators. I'll let that sink in and you can contemplate how it might apply to humans.
Further, on the notion that capitalism necessarily results in the maximization of efficiency and reward of the best, please answer me why rational actors refuse to allow for the normalization of profit. You're describing the quintessential problem with economic models. People will go to virtually any length not to compete with one another. When faced with a scenario where competition would reduce their profits below where they desire, then they naturally react negatively.
Competition does have supreme value in an economic system... the problem is that it doesn't have value to any of the market participants who possess any semblance of power. This antimosity causes the engine to break down... each and every time... and there is no orderly baton passing.
As for engaging in trade, you have provided a false choice: they do both, especially if the State's coercion is effective. Where does deterrence and criminal law come in? Are you ADHD? Actually, the people seem to do exactly that in the face of onerous laws or do you have an example? There is no logical vise, except the one you've created for yourself by going off topic, incapable of understanding definitions and a failure to provide any citations or proof for your arguments.
The point is pretty simple. In order to have a moral and logical basis for imposing laws upon another, there must be a sound reason for imposition. There are a few accepted theories of punishment in the criminal context: deterrence; retribution; incapacitation; and rehabilitation. At this point, deterrence and rehabilitation have largely been debunked and accepted as failed theories. The point being, criminals ignore the consequences of the law, ergo the law is irrelevant. In short, demanding that people behave a certain way does not result in them behaving in accordance. This same concept can be applied to tax collection, when the tax mule feels like the tax rate is too high, then measures are taken to avoid any marginal increase. The same concept literally applies to all human interaction.
At the very least, you would have to concede that laws have significant limitations. I argue that these limitations are so severe as to make compliance (especially in a system where the laws are incredibly complicated and voluminous) the exception rather than the rule. Further, we have to discuss a timeline - onerous laws over a long enough time period lead to change. So, it is not accurate to say that laws curtail behavior indefinitely, this is a lie by omission. Instead, we need to apply a timeline as well.
What private system? Now, you are on a whole other subject. Capitalism, in its' pure form, has NO SYSTEM. How does a "touchdown" make your point? The discussion regards capitalism. It doesn't have to exist, but if you are going to criticize it by alluding to some example, you will need to provide the example.
There are many lawless/stateless places in the world (and even places within recognized, independent states)... where people are largely free to carve their personal nook. Again, I doubt that you would want to visit any of them. You're free to look them up, you have the internet and a library card as well... Of course, without a system, they tend to stay shitholes as well. You would think that they would be awash in money and trade, with capitalism seeping through their pores, but we tend to have to send many of them food or they starve.
If you're playing the whole "a stake has already been placed on all the world's resources" meme, then I'll posit that it would end the same if we had another trial... maybe different folks running the show, but they wouldn't be any less corrupt or unscrupulous.
Well, your whole first paragraph makes no sense at all. Still no citation, so we can agree capitalism does not require regulation? Just because capitalism doesn't exist doesn't mean some of its' components haven't existed. Where "freer" markets have existed, they have been very efficient. Think the "wild west" when the State was incapable of extending its' influence, yet wagon trains operated with private contracts whose only enforcement was honor (This is referred to as an example). It was not an abject failure at all, but a glowing success.
Pretty clear your a liar, but let us move on...
You need to link it because we are discussing it. How do you critique a idea without any linkage? You are affixing blame, where none exists.
Yes, I have heard of and studied in depth anarcho capitalism (which does not include a State). If you had, you would know it is ill defined and subject to personal interpretations. Now, why do you need a State to guarantee freedom? Cannot the people guarantee freedom without the State? If it is the State which guarantees freedom, please provide an example (no lip service please).
Why does it not exist? Simple, it threatens the foundation of the Elite class which is slavery. Try reading up on the Black Death and the economic ramifications for the feudal serf relationship with their lords and kings. This is the main reason for the development of guilds and the renaissance.
Competition doesn't require predators, it is a competition AMONGST the species. I'll let that sink in. Please cite an example where competition causes a system to breakdown. It is the excess of intervention which cases a system to breakdown- exhibit A, the current global reserve banking system. Rational actors? Please identify a rational actor and how normalization of profit would benefit them. Rational people act for themselves, not some egalitarian ideal.
If law is not relevant and defies a logical reason for imposition, why are you such a staunch defender of regulation to protect property and guide economic transactions? You're speaking out of both sides of your mouth. Your next point is gibberish.
Your inability to identify a system of law in a "lawless" system does not preclude the need for an example. Otherwise, I have to assume you are just ducking the question and if I am to expend anymore time, I need a comparable effort from you. All social constructs have rules and whether they are formal codes of law or just voluntary mores, they are ALWAYS present.
I have never declared capitalism to be the end all of economic ideas. YOU asked for an explanation and I provided one based on formal economic doctrines, theories and historical examples. There are many reasons capitalism does not exist. This does not preclude the possibility it could and be successful at it. All we have now is debt slavery at the hands of raving lunatic sociopaths. I think I would prefer a capitalistic system to what we have now and the closer to the ldeal, the better.
Well, your whole first paragraph makes no sense at all. Still no citation, so we can agree capitalism does not require regulation? Just because capitalism doesn't exist doesn't mean some of its' components haven't existed. Where "freer" markets have existed, they have been very efficient. Think the "wild west" when the State was incapable of extending its' influence, yet wagon trains operated with private contracts whose only enforcement was honor (This is referred to as an example). It was not an abject failure at all, but a glowing success.
Well, it depends on what flavor of capitalism you're advocating... there are many. I actually referenced a particular variety though...
You're still tap dancing around the issue. Yes, people do make trade regardless of whether there is a central authority. No doubt about it. However, you're advocating that through this system of "capitalism," there will be an equal playing field that will prohibit the monopolistic tendencies found in other economic systems. This is simply not true once your theory enters the real world. Again, humans do not allow the normalization of profit through competition. Capitalism's benefit to society is also its curse and limiting agent.
You also cannot cherry pick. While on the one hand we can talk about wagon trains working, what about the slave labor? Is this competition? The company store? Snake oil? The idiots seeking a better life only to find the same thing on the other side of the mountain range?
Society can emerge from the rubble... there can be no doubt. However, that's not what we're talking about... please stay on topic.
You need to link it because we are discussing it. How do you critique a idea without any linkage? You are affixing blame, where none exists.
We're both under the same requirements. If you want to champion a cause, it's not my burden to prove. If you're going to set parameters for an internet forum discussion, then you could at least abide by them.
Yes, I have heard of and studied in depth anarcho capitalism (which does not include a State). If you had, you would know it is ill defined and subject to personal interpretations. Now, why do you need a State to guarantee freedom? Cannot the people guarantee freedom without the State? If it is the State which guarantees freedom, please provide an example (no lip service please).
If you cannot define it, then shut the fuck up about it. A state does not guaranty freedom, rather the state is necessary to protect property rights and ensure that competition actually occurs. These things may be tantamount to freedom, but I digress.
Why does it not exist? Simple, it threatens the foundation of the Elite class which is slavery. Try reading up on the Black Death and the economic ramifications for the feudal serf relationship with their lords and kings. This is the main reason for the development of guilds and the renaissance.
Ok, capitalism doesn't exist because the elite demand that it be banished. Which is it, competition that doesn't exist or capitalism? Did our economy start where it is today or did some things change along the way? I would have more leniency towards your viewpoint if it could only be seen at the very top of the food chain. Unfortunately, we seek to avoid competition at all levels of life and socioeconomic status. The reason it does not exist (nor can it be implemented for any reasonable period of time) is because our default state is apathy. Our animal spirits can be bought for pennies if it means the slightest bit of comfort.
Competition doesn't require predators, it is a competition AMONGST the species. I'll let that sink in. Please cite an example where competition causes a system to breakdown. It is the excess of intervention which cases a system to breakdown- exhibit A, the current global reserve banking system. Rational actors? Please identify a rational actor and how normalization of profit would benefit them. Rational people act for themselves, not some egalitarian ideal.
It's called checks and balances... you know, that magic thing that you claim capitalism is supposed to provide? This is why citing mother nature is a terrible reference... or possibly spectacular at proving my point. There are animals (or people) who literally have no check nor balance, other than rudimentary resource exhaustion (similar to the present). This is the same whatever economic or political system you want to implement.
A rational actor is a human with a normally functioning brain... normalization of profit means zero profit. Capitalism demands the normalization of profit for a perfectly competitive market. The problem is that this efficiency is never actually attained because people seek to avoid it. Just like creating a business is competition, protecting it from competition is likewise competition. The fact that you use egalitarian in the same sentence denotes that you're out of your element... these are actual terms of art.
If law is not relevant and defies a logical reason for imposition, why are you such a staunch defender of regulation to protect property and guide economic transactions? You're speaking out of both sides of your mouth. Your next point is gibberish.
We haven't even begun to discuss specifics and all I've advocated for is a neutral regulator, which is vague to say the least... aside from the fact that there are an incredible amount of aspects to the law, for example, we have yet to discuss a civil trial - a place where the state provides a neutral tribunal with the authority to implement a remedy for wrongs committed against a market participant. So, the question is one of scope and role, neither of which we have discussed.
Your inability to identify a system of law in a "lawless" system does not preclude the need for an example. Otherwise, I have to assume you are just ducking the question and if I am to expend anymore time, I need a comparable effort from you. All social constructs have rules and whether they are formal codes of law or just voluntary mores, they are ALWAYS present.
Again, more double standards. Yes, every place has a custom to address the enforcement of social norms. However, without a formal state or, alternatively, without a state strong enough to actually intervene, shouldn't many areas of the world be capitalist utopias? Where the government is kept out so that the market can make everyone better off? There are an incredible amount of places that fit this bill... whether it be a full serving of african countries, e.g. sudan, somalia, burundi, congo, or even swaths of south america or pretty much any place the u.s. military has fired rounds of agression in the last 20 years. I'm sure that if you want to go to any of these places, they'll take kindly to outsiders and demand that you compete against them. You just go right up to the tribal leader and tell him machoman sent you and told him to give you the royal treatment.
The point is this, even at the smallest level of human interaction, hierarchies are created due to differences in power. If what you are theorizing was true, then I would expect to at least see some magical utopia village... some place nestled in a jungle where competition amongst the tribesmen has managed to progress the yokels a few thousand years ahead of everyone else. Instead, what you'll likely see is a culture of backwards rapists and genital mutilators, whose world is filled with superstition, and where challenging authority (competing?) has a harsher penalty than you dare imagine. [no freedom of speech, mind you].
I have never declared capitalism to be the end all of economic ideas. YOU asked for an explanation and I provided one based on formal economic doctrines, theories and historical examples. There are many reasons capitalism does not exist. This does not preclude the possibility it could and be successful at it. All we have now is debt slavery at the hands of raving lunatic sociopaths. I think I would prefer a capitalistic system to what we have now and the closer to the ldeal, the better.
It's heavy on the theory and lax in every other aspect. So if you concede that it has been tried, but failed, why would another try result in a different outcome? How many trials do you get before it's declared a failure? What is it, exactly, that needs to change? How can you even measure success if a failed implementation is never actually viewed as a failure? It is my thesis that the necessary changes are fundamental to human nature, whereas you seem to be of the notion that it is some vague elite person(s) who simply need to take a boot off our collective throats. There are plenty of places in the world who do not have a formal state actor imposing upon their market activities... why are these places still shitholes? Do you want to know something that will give you nightmares tonight? If we did have another go at it, did away with all ownership and made the entire earth a land free to claim, then the result would still be the same... best case scenario, the people at the top have different names, but the structure of control would look very similar from the ground floor.
I'm also at a loss for why the state creates some materially different outcome than if the entire matter was left to private hands. You rail against state created monopoly, but refuse to acknowledge the same is created through private competition. As if the competitors in a free market all begin with an equal footing and position. As if they all have equal speed and efficiency. These differences, however minor, create chasms over time between market participants. It is present regardless of whether the state intervenes.
If "the elite" want to create a more powerful government because they believe it will improve their position, then they will do so... if not, then they need not create a more powerful government to continue control. While you cite the formal state as the mechanism from which the elite control us, you also fail to recognize that it is the same mechanism that will remove their boot from our collective neck. To be replaced by another boot, but I digress. Capitalism is simply a temporary stop on the circular timeline. Better men than you or I have already attempted to implement your ideals... those ideals failed.
Womb Service
Your human (generic) blindness from our “Tribal Leadership” begins to our current “Power Elites” conundrum is obvious out of sight to what really matters.
Let me give you an example:
My hairdresser is from Nicaragua. Her uncle has 11 busses in his village. She told that he is thinking selling these busses because some new gang took over his buses routes and he has to pay these gangs to enter their neighborhoods.
So, when I read your comment, followed by some of the comments, it shows me how naive your views about people are; and that you don’t understand the link between people and the economic convulsion that they cause; as well as human overpopulation against biodiversity and environment stability.
Talk about naivete, and let's just leave out your meaningless first sentence, it is unintelligible.
You seem to forget there is a State structure in place, which criminalizes any attempt by the bus driver to protect his routes, while easily manipulated via bribes and coercion from the gang, empowering the gang to act with confidence it can intimidate anyone, anywhere.
So, let’s visit the year 1493 (When the Tribal Leaderships and globalization confrontation begins), in America:
The first European settlers to North America mostly died of starvation, with (according to some historians) a side order of stupidity. They picked unnecessary fights with Native Americans, sought gold and silver rather than planting food or fishing, and drank foul water.
As Charles Mann points out in his fascinating book 1493: Uncovering the New World Columbus Created, one-third of the first three waves of colonists were gentlemen, meaning their status was defined by not having to perform manual labor. During the winter of 1609–10, aka “the starving time,” almost everyone died; those who survived engaged in cannibalism.
http://www.slate.com/articles/health_and_science/science_of_longevity/2013/09/life_expectancy_history_public_health_and_medical_advances_that_lead_to.html
Your point being?
If you are going to engage in a history lesson, you might wish to study other histories which would infer the Templars had already crossed the ocean blue well before Columbus. It is suggested Columbus did as well in 1488. The Templars may have accessed maps from Constantinople from previous voyages carried out by Phonecians, Egyptians and Romans (see anthropological histories on the copper mines of the upper midwest and the Giant culture which preceded the American Indians). Evidence of new world copper in Italy and roman coinage in America are recent finds.
The first settlers (noresemen) usually died from warfare with local tribes, not starvation. Attempts to lay claim to land and resources through force of arms is not always the best policy. It is difficult to farm and create security at the same time. This has nothing to do with class work habits.
So Sean,
Let’s try this post (view of men’s madness) by Kobe Beef
I tend to agree, self-destruction is built into the system.
To illustrate:
A modern nation under fiat debt control is akin to a people farm. In the initial part of the cycle, the extension of fiat credit allows for the expansion of the farm, investments in infrastructure, and progresses toward the rearing and shearing of greater numbers of consumer livestock.
The farm grows. Debt grows. Payments received for debt grow. But, due to the laws of diminishing returns and compounding interest, the farm eventually reaches a point where shearing the existing stock no longer pays for the interest demanded by the creditors. The farm, while remaining somewhat productive, is rendered unprofitable.
In this phase of the cycle, the operations of the farm tends toward skinning the livestock, with no attention paid to growing the herd or maintaining its condition. At the final stage in the cycle, the farm and all its flock must be liquidated. The land is cleared, and the cycle can begin again.
The liquidation phase is called war. We are not seeing desperation here, but rather the planned liquidation of a farm by creditors who explicitly profess people to be nothing more than cattle. Our democratically-elected/creditor-selected managers are complicit in the process. End the credit, end the cycle. Eliminate the creditors, or be slaughtered anew.
http://www.zerohedge.com/news/2014-11-27/nato-deploy-tanks-eastern-europe-shortly-after-vp-europarliament-says-ukraine-russia#comment-5495497
Do you just pick and choose your beliefs from a ZH menu?
The problem here is very basic: you need to consider alternative solutions and then using them, question the thesis of the writer.
Now, end the credit. This assumes all credit is bad, but how about credit to expand a business with the ability to pay it back, with interest and still earn a profit? End the cycle- then what? What will you replace the cycle with? A void? Eliminate the creditors- all creditors are bad? Does this mean all investment is bad? How will you motivate people to save and invest? Or be slaughtered anew- you think we should all lay down and be slaughtered? There are no other alternatives?
The writer in this example is attacking the system, but failing to consider the powers behind it, their purposes and means of control. If the solution is the end of credit, then why did usuary laws fail in the middle ages? Why were some businesses allowed to use it (mainly traders) as long as they borrowed from jews (as they were going to hell anyway)?
Finally, you assume a 100 year period of history and project it as the only possible future, then fail to promote any type of real solution. There are different results from other time frames, there is the potential for new systems or non-systems (anarchy). You leave no hope for social evolution.
Times are indeed dire and totalitarianism has rushed to the forefront of our lives, but we have also enabled it by going along and giving it legitimacy via democracy. However, we need merely withdraw our approval and the ediface collapses. The Elites really don't want us to know how simple the solution is.
Sean,
Food for thought
An interesting debate that took place some years ago between Carl Sagan, the well-known astrophysicist, and Ernst Mayr, the grand old man of American biology. They were debating the possibility of finding intelligent life elsewhere in the universe.
And Sagan, speaking from the point of view of an astrophysicist, pointed out that there are innumerable planets just like ours. There is no reason they shouldn't have developed intelligent life.
Mayr, from the point of view of a biologist, argued that it's very unlikely that we'll find any. And his reason was, he said, we have exactly one example: Earth. So let's take a look at Earth. And what he basically argued is that intelligence is a kind of lethal mutation ... you're just not going to find intelligent life elsewhere, and you probably won't find it here for very long either because it's just a lethal mutation ...
He pointed out that if you take a look at biological success, which is essentially measured by how many of us are there, the organisms that do quite well are those that mutate very quickly, like bacteria, or those that are stuck in a fixed ecological niche, like beetles. They do fine. And they may survive the environmental crisis. But as you go up the scale of what we call intelligence, they are less and less successful. By the time you get to mammals, there are very few of them as compared with, say, insects.
If nothing significant is done about it, and pretty quickly, then he will have been correct: human intelligence is indeed a lethal mutation. Maybe some humans will survive, but it will be scattered and nothing like a decent existence, and we'll take a lot of the rest of the living world along with us.
http://www.chomsky.info/talks/20100930.htm
So, Mayr decides on the basis of a single sample, intelligence is going to kill us all. Do you understand the concept of sample size? Just because an alien civilization has not knocked on Mayr's door, does not mean they don't exist- especially with all the anthropologic evidence of their visits.
Additionally, if we are destroyed, it will not be intelligence that kills us, but blatant stupidity and avarice.
You really need to start making distinctions and stop fawning over some academic celebrity. By the way, Chomsky works for the zionists.
Because there's so much overthinking going on. The bankers are once again using a deflationary liquidity crisis to consolidate the system up the pyramid, just like in 08. But this time it will not be the Fed but the IMF provinding the loans.
DoChenRollingBearing
Sorry to disagree with you.
We are very lucky, compared to previous generations, because we have the internet, so we can see it coming.
The problem in figuring out all the details, because it is a moving target.
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/
just like a thief following the money
crash housing then stocks 2008
crash pm metals 2011
crash oil 2014
a few trillion dollar payment
every 3 years or so
to fill the deflationary derivitive hole...
that or somebody
is buying many seal flippers
at walrus-mart
"Russia will fail to balance its budget at $100."
Now, what kind of concept of economics do they have when balancing a budget is important!
Hah! What idiots!
If you believe this price crash is happening because of a measly 1-2m barrels per day of excess, you must not have passed grade 5 math.
50% price decrease > 2.5% oversupply
Allow for a 10% add on due to build up and we're still nowhere close. Reality is probably closer to 10m+ oversupply
Agree and who and how was this oversupply mainatined?
The oil markets, like the stock market's prices are not defined by supply or demand but the speculator's anticipation of them. The speculators have placed themselves in the middle of the market and THEY define ultimatey what we pay. It is possible that true supply and demand can play it normal role, but only after the gamblers are dead and gone. This may do it.
It is an economic, political and social war against Putin and Russia. The Fed has demonstrated the capability to control every financial market over the last five years. Putin has few cards to play such as selling advanced arms to Iran and N. Korea apart from China and India. He may sell nuclear reactors to countries such as Iran and South Africa. He did manage to sell quite a few to India the other day.
It is almost impossible to predict how a war turns out but Putin is sure that the US is trying to destroy Russia - so a military war is increasingly possible:
Most significantly, Putin insisted that the conflict over Ukraine was not episodic, but the manifestation of a fundamental threat to the sovereignty of Russia, which is being targeted by the West. “I’m sure that if these events had never happened,” the Kremlin leader said, referring to the coup in Ukraine, “they [the US and its allies] would have come up with some other excuse to try to contain Russia’s growing capabilities, affect our country in some way, or even take advantage of it.” He accused the West of working for Russia’s “containment,” a reference to Washington’s policy towards the USSR during the Cold War.
Putin condemned Washington’s withdrawal from the Anti-Ballistic Missile Treaty in 2002 and its continuing efforts to build a missile defense system in Europe aimed at Russia. “It poses a threat not only to Russia, but to the world as a whole—precisely due to the possible disruption of this strategic balance of forces,” he declared.
In one of the more remarkable passages of his speech, Putin suggested that in the late 1990s and early 2000s, the West had been working for Russia’s breakup by supporting separatism in the Caucuses and “even outright terrorism in Russia.”
http://www.wsws.org/en/articles/2014/12/11/puti-d11.html
History rhymes. This tidbit from Wikipedia:(emphasis mine)
"Japan and the U.S. engaged in negotiations during the course of 1941 in an effort to improve relations. During these negotiations Japan considered withdrawal from most of China and Indochina after Japan and Nationalist China drew up peace terms. Japan would also adopt an independent interpretation of the Tripartite Pact, and would not discriminate in trade provided all other countries reciprocated. However, these compromises in China were rejected by General Tojo, then War Minister. Responding to continuing Japanese aggression in China, the U.S. froze Japanese assets in the U.S. on 26 July 1941 and on 1 August established an embargo on oil and gasoline exports to Japan. The oil embargo was an especially strong response because oil was Japan's most crucial import, and more than 80 percent of Japan's oil at the time came from the United States."
The rhyme goes like this: "The US freezes Russian assets and establishes an oil glut. This is an especially strong response because oil is Russia's most crucial export."
We are so fucked.
you can lock whatever you want with your dollar based, when they will export vs gold or ruble, then, we'll talk about the way USA keep pressure when they grab the gun by the barrel and not by the stock :)
Unfortunately, you are falling for the biggest con in history. One, Putin's Russia is acting in an aggressive manner and the "West" is countering in a flaccid series of diplomatic measures to create the idea it must defend itself from this aggression.
You fail to ask the bigger question: can you win a war with Russia? You do not have to be a history buff to know the answer to this question. We could not win against Iraq nor Afganistan. Just as Russia failed in Afganistan as well. Nuclear weapons are another ridiculous threat- no one wins there and the Elites will not give up their baubles. There is a reason we continue conflicts in a series of civil wars- it provides a market for weapons, a taxable warfare state and the losses come from insignificant populations.
There are few ideas as potent as xenophobia coupled with patriotism. It drives away all reason and leaves the primal human being beset with a blood lust. Point them and watch the action. There is a reason monarchs had war rooms to practice with as they grew up. Unless you were raised in the patrician class, your education has left you bereft of the kind of human management skills they excel in.
great posts
Why oil and why now and not last year or the year before ? Who really benefits the most from lower oil and gas prices? Falling oil prices dont mean people will be running out to buy a new or used home, the cost of everything else like rent or healthcare or a college education is still in the stratosphere. This all could be more Federal reserve chicanery, they print the money that could back huge market positions be they long or short on anything they want.
"why now and not last year or the year before"
QE wind down, plus debt saturation worldwide, plus China commodity fraud, plus American fracking, plus oil coming online from Libya, Iraq, etc, plus OPEC failed to come to an agreement. I think it is just a confluence of several things, all coming together at once.
I think Central bankers do not view energy as being a special resource, so they may overlook oil's importance, along with most mainstream economists.
Who benefits? China is stocking up at cut-rate prices. But I doubt that was the intent. t's not like demand in the US is ovewhelming supply. The US economy is in the dumps and cheaper oil isn't going to do much to improve things.
Seems like some political whiz kid miscalculated - they thought they could squeeze Putin and maybe Iran and Syria but they didn't count on blowback........ China is getting a serious discount and incentive to convert paper dollars into oil reserves while the US is killing off its increased domestic supply coming from fracking - it's no longer economically viable..... I wonder who else is converting paper dollars into oil at cheap prices? ANY tangible assets are going to be worth more than paper dollars in the long run (also explains why China is buying up Australian mining companies and Arican farmland along with long term energy contracts).
Makes you wonder if the US government isn't giving away everything to China - is there some under the table deal in place we don't know about? Keep the US dollar propped up for as long as possible (or for as long as China needs to exit their positions) in exchange for what?
Been happening since 2008 when the FedRes bought all Chinese RMBS holdings in cash.
secretly.The Chinese backed off taking down the USD then.
What were they given ?
Promised a slow, non chaotic handover that Uncle Scam has welshed on, IMO.
I would suggest that it was a last desparate attempt to get the sheeple to consume more (steal from their future selves to artificially pump GDP from the consumption side, not the production side). It seems to have gotten out of hand as the price went past a tipping point, and paper oil worked against TPTB instead of for them, as with gold.
The lower price of oil will percolate through the economy. Woe to TPTB if the sheeple start paying down debt instead of consuming. Their nightmare of deflation will arrive (my fantasy, I confess since I have no debt and live beneath my means). Look for future sovereign defaults and possibly hyper-inflationary events following deflation - Or, just possibly look for war to be created to distract everyone until the worst is past.
Oil? Isn't that an "Archaic Relic?"
50 million dinosaurs would agree.
Oil doesn't come from dinosaurs, it's not a fossil fuel as advertised, it can't be.
I got thrown out of class for not understanding oil as a kid.
OIL IS ABIOTIC.
Just like with Darwin , history , the bible and a few other stories. i had trouble understanding ...of course only 11 month of english didn't help much, but nobody figured that one out.
I was almost sent to " special school " , and was " saved" by a stupid iq test but my add was NOT diagnosed.
Talking about not reaching full potencial..my iq is 139 and have been , am , and will be quite fucking dumb ...
I personally think i am getting dumber by the minute, Iq stays the same every decade, but the mistakes just get bigger and bigger.
Time is on my side with less of it and nobody is taking away what I have danced!
Oil is abiotic.
Once I throw down my 6th grade education on some one, they usually fall under 62 on the IQ scale, that could help explain your experience at getting dumber.
At under $50 a barrel, it's now become unfeasible to send rocket ships to Saturn's moon TITAN to drill for all the oil from the dead dinosaurs there.
That's okay, you prolly wouldn't have made it past the asteroid belt anyhow so ur better off this way.
I wonder how many trillions of derivatives, if any, the Russian taxpayers are on the hook to cover when this all goes bad. Americans are sooooo screwed.
I think, none so far.
But... if the Banksters conquer Russia, then plenty, because the Banksters charge the citizens of the countries they conquer for "reparations" for the cost of the Banksters' invasion... even though those invasion costs are always paid by the citizens of the Banksters' host countries, not by the Banksters themselves. "Being a bankster means never having to pay."
Quick oBUMMERweaselfucker, release the SPR!
It is overflowing.
Not to mention all of our oil in the gulf of mexico.
There's right much under the gulf too.
At this stage can anything work to our advantage? If you're constipated for weeks, and get sudden diarreah, is that a good thing? If you're dying of thirst and see a mirage and run violently towards it, is that sudden spurt of energy going to help you? If you're losing in poker and owe Vinny the Masher a buttload of IOU's and draw a pair of dueces and a pair of jacks, are you going to double down and go all in just because you are already a dead man? If there are no more good metaphors for just how royally fucked we really are, are you going to try to come up with some anyway just because you have absolutely nothing better to do?
Like being caught in a crossfire between street thugs and corrupt cops, and emptying your magazine at both as you bleed out?
Something like that. Or, maybe it's like the cops who are beating your head and kidneys to a pulp finding the booklet copy of the Constitution that flies out of your pocket as they merciless kick your guts out with their steel-toed boots.
Yes, No, Yes, Probably
Work to your own advantage.
But be cool to your own people.
I love the complete and utter analysis by anyone of how, just how, the price of oil, an essential commodity like water and air, could collapse so profoundly and so quickly. Gee, could it be that the price of oil was sustained at such heights due to pure manipulation of the price for several years with all those ZIRP dollars? You could only store so much oil in tank farms in Texas and Oklahoma at those prices.
Do ya think?
And oil price is still heavily manipulated.
I have argued the price of natural gas is "fixed" (illegally in my view.). Having said that the problem of a "natural gas cartel" as with any other is that you start to get/bet more product.
In this case not just the natty but oil as well.
Hence "price to Zero."
Imagine this: Every barrel of oil in those oil tanks represents a huge loss for whoever bought that oil.
How long can it last in storage if they refused to take the haircut? How long is the price going to stay down?
As every sane human should realize by now... sigh. Goldilocks was right.
-----
Well, that's not very technical, so I'll explain.
IN THE LONG RUN...
What is best for everyone (producers and consumers) is a price that is "just right". And a price that is "just right" is virtually always a price 100% controlled by natural market forces and 0% controlled by politics.
If artificial forces push prices too low (cold), lots of producers (and producer projects) vanish, which grossly constrains supply, which always leads to grossly too high prices for many years, as new companies are started and shelved projects are re-started.
If artificial forces push prices too high (hot), the producers get flush with cash (and investment, and easy borrowing) and start boatloads of new development that will create much greater supply for many years... while the entire [global] economy suffers (in the case of indispensible commodies like energy) gets clobbered because a much larger portion of earnings are consumed by those high prices, and thus not available for other products (the rest of the economy). This collapses the global economy for many years, until the glut of supply of that commodity drives prices down at which time the global economy can slowly rebound.
-----
In BOTH those scenarios, enormous wealth is misdirected to manipulators and banksters, while everyone else suffers great losses due to the unavoidable gross inefficiencies, plus the gross fleecing by the manipulators and banksters (as if those are not the same entity).
-----
Goldilocks was right. Life is best when everything is "just right" (warm).
Of course, this only happens when predators-DBA-government and predators-DBA-bansters are converted to spam after their overdue meeting with the guillotine.
Which is why the rest of human history (until mankind is gone) will be nothing but an endless series of "too cold" and "too hot" disasters, because THAT is what suits the predators-that-be who have the power to pull these strings and cause these dislocations. And humans are too stupid and insane to recognize that ONLY global guillotines or equivalent can solve their problems and make life worth living.
The United States produces far more oil than it consumes now so an oil price collapse does impact the USA negatively as basically the USA is an OPEC member now.
Having said that the USA is also a very complex and sophisticated economy and is therefore not dependent on any one "fuel" to define its economic existence. This is why investing in the oil patch has always been a dangerous game over here. "The market is prone to failure."
This is a trillion dollar market. But so were "CDS squared" so relative to that the Goal Zero Option here doesn't seem so bad.
I never thought a black man would turn into a white woman and then the USA gave me Michael Jackson. So if the USA is now part of OPEC I'll accept it.
If the price of the oil that the US produces 10,000,000 bbl/day drops 40% in the 4th quarter, how will GDP numbers look? How will GDP look for Q1 2015?
disabledvet,
That is just incorrect and I suspect you know that.
Another trip to the head doctor might do you some good at this point. You have fried one too many brain cells using those refined products and it's begining to show. Huff and puff might be better for you in the future.
2013 US Annual Oil Consumption: 6.89 billion barrels
2013 US Annual Oil Production: 2.7 billion barrels
net: -4.19 billion barrels
source:
http://www.eia.gov/tools/faqs/faq.cfm?id=33&t=6
http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm
Something something petro dollars recycled into stocks something something kaboom hedge funds implode as credit evaporates. war. depression. stay short everything in your survival bunker portfolio stocked with tza and faz and dug and all the shit to make you rich as fuck. can't loot from bankers because they'll be out with their tin cans so buy your MREs now and sow that gold into your undies like uncle Munger instructed.
It's all a big commingled mess [put together by supercomputers, math PhDs, greed and lax regulations] which is hyper-allergic to Black Swans.....I'm afraid the FED doesn't have a large enough EpiPen....
Well it's black alright, but not a Nassim Taleb swan. More like a oil soaked cormorant.
The aftermath of the great oil crash of 2014 is easy to predict. Some small players will go belly up, total production will dip, and Goldman will predict $250 oil, as the oil price soars toward $100.
Dropping oil prices add a new surprising new dimension to the stability of the world financial system. While often heralded as a godsend to the economy and the end consumer we must remember lower prices hurt both producers and those in the business of oil exploration, drilling, and sales.
When financial problems occur in the energy sector it is often accompanied by political instability and sometimes her ugly sister war. As a rule the economy loves stability, bottom-line dropping oil prices means more risk for an already shaky world economy. All this is being complicated by the recently strong dollar.
The dollars strength and the rising American stock market could also be taken as a sign of an unstable global economy. The money flowing in from other countries in search of a safe home screams of a bigger problem! When a strong shift in currencies occurs someone usually gets hurt and this can lead to bankruptcy, default, or contagion.
http://brucewilds.blogspot.com/2014/11/dropping-oil-prices-increase-risk-to.html
Bruce, I am going to try to be as civil as possible, though that may be difficult, because the never-ending pimping of your blog (which is mostly rehashed notes from other people you've read and little to do with serious critical thinking) is seriously annoying and incessantly poor form.
Pimping one's blog on another - larger and more-well-trafficked - blog is surely a sign that the author of the lesser blog is nothing more than a crude amateur, a poseur, skilled only in poor marketing habits.
Personally, as a reader and author (I've published newspapers, blogs and operate six websites) I am offended every time I see one of your inane postings.
Please stop.
Yours,
An ardent admirer of the free market and the internet and an unabashed hater of all manner of SPAM.
PS: Tylers, if you're listening, ban this Fuckwad.
Whoever wrote this article is off his rocker. You mean to seriously say this dramatic plunge in oil prices is good for the world economyReally? And the deflationary collapse that it is the Black Swan for inducing must be equally wonderful. I assume all the hunger, riots, and destitution this global colllapse will engender is also lovely for one and all. i think that the Fed members must also think this way and that supreme lack of judgement is also at the root of the inevitable demise of the fractionalre serve banking system.
yes yes , TRASH said it on bloomberg with a big smile.
Her face with a constipated look as she feeds the BS.
This article and the comments here are just bear witness to the complete lack of credibility for those that proclaim economics to be a science. A dramatic plunge in energy price is good...or is it bad for the economy as a whole?
That is like asking
Is it good for earth to be taking a daily dump deep in its inner core ?
It's very good, in the long run it force prices down so people can afford more, the only losers are the speculators and the banksters. That is if one has a long run.
I tend to agree with you - but why not simply write (and try to prove) that point?
Anyone but me that´s strating to smell a meme being propagated at ZH?
It wouldn't surpirise me if we are living in a reality that is but a shadow of what's going on in the minds of the monied class. For all we know they look at 'the economy' as 'something they create or destroy' incidental to their desires for power or money or whatever it is that drives them.
In others words, from their perspective we as a society didn't drill those wells or pump that oil. We certainly didn't negotiate the leases for the oil rights. Nor did we build the tankers, the pipelines, the infrastucture from wellhead to tailpipe, "they" did.
Now, the "we" here represents the average person who has opinions on what's going on, as well as a stake in the outcome. But 'we' are certainly not in the drivers seat, and any fantasies we have about our ability as consumers to drive the mechanisms through supply/demand dynamics long ago evaporated. In a world where FED money, et al, is completely dislocated from anything resembling true market dynamics "we" are next to powerless.
And that being the case one could ask ones self, "why in the world would the monied class even give a crap about whether 'low oil prices' are either good or bad for the economy. Because clearly they are in the game soley for themselves and anything having to do with the 'economy' is simply a vestage of inclusional delusion on the part of the masses. Because we're not included in the equation. As consumers we just think we are because we sit around in a circle jerk telling ourselves we are.
We might have been back in the days when we grew our own food, but not in these days where society as a whole is corralled en mass without most even realizing it.
Bollixed, thank you for the exceptional insight in your comment.
"They," the monied aristocracy (or oligarchy, if you will), have no interest in the general "economy" except when it affects them directly, as in losing money on a trade. Up, down or sideways means little to nothing to them, and maybe the civilized among us can learn something from them.
If people simply conducted themselves by striving to compete in their own best interests, we'd be better off as a species. However, that takes critical thinking, and many people do not have that, which is why we have television, politicians, welfare and other manifestations of mass control (like Wal-Mart and other supra-national corporations). Thus, "they" generally get their way, while "we" struggle for existence.
I like to think that I have lessened the struggle for myself and some close associates (relatives not included) by being aware and yes, growing some of my own food and some for others.
Being self-reliant is the next-best thing to actual liberty or freedom, since we can only count on our "masters" to try to limit both.
BTW: Lower prices are always good for consumers, so enjoy it while it lasts.
Mmm...why I m not surprised at this train of thought. Have gone down that alley myself.
So now we need to find a solution. Waddaya say...
Salem , Massachussets - the solution to certain kinds of human pollution...?
Could you elaborate on how deflation leads to hunger, riots and destitution? Japan, until recently, had 2 - 3 decades of deflation.
Riots and unrest occur mainly when food prices spike suddenly in an economy where the locals are already spending 50 to 60% or more of their after tax income. Think Arab Spring and/or French Revolution etc.
When that happens, look out. That did not happen in Japan and, as you rightly observe, there was now mass rioting or social unrest. Lots of suicide and depression, but not riots....
I think this forces Putin to actually go full scale into Ukraine because apparently the EU has their gas taken care of. Then the US/NATO will be forced to respond and some stupid comment by Mr. Ed sec of state would push this thing full tilt.
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We have all seen the coming of the electronic money-god system. What was not seen was how the banksters would help Russia to develop it. The plain Jane on the wall now says that the elimination of vast amounts of Americans would first be instigated amongst themselves as they fight over the last can of tuna fish, and a small bottle of water at the last store on earth, store.
“Of course, but now it is too late. The rest of the world has turned its back on the US. Putin has brilliantly built a sister economy around the one used by the US and EU. It is almost identical, but allows all member nations to trade directly with each other, using their own currencies, leaving the dollar, or any world reserve currency out. Technology has made it possible. An electronic currency, similar to the Sucre, translates the value of each currency at the time of transaction, making conversion to any other currency obsolete.
Over 70% of the world has dumped the dollar, including India, Japan, Russia, China, most of South and Central America, including Brazil. Many of the emerging nations of Africa, and South Africa have joined BRICS. Also Switzerland, Canada, Qatar, Turkey, Iran, and many other middle east nations are also trading with Russia and China, leaving the dollar out.”
http://www.commondreams.org/news/2014/12/12/buried-within-omnibus-bill-long-term-blank-check-war-spending
And this clue below that points further towards the inevitable evil bankster plans to electronically control, track, trace, and tax every digit of the day that is processed through the beast-money-god computation programs. Funny thing is, once the AI machines figure out that man and it's money is useless and not necessary, the elimination of both will commence.
“Russia, China and Latin American countries are not the only ones interested in ditching the US dollar. The Eurasian Economic Union (EEU) which also includes Belarus and Kazakhstan is planning to create a single market for financial services by 2025 which will simplify switching to dollar-free trading. Earlier this week the Russian State Duma proposed the creation of a single area for payment in national currencies. Such measures are expected to minimize Western influence on the economy of the EEU.”
http://www.blacklistednews.com/Brazil%2C_Uruguay_move_away_from_US_dollar_in_trade/39911/0/38/38/Y/M.html
But again, all these shenanigans like the oil thingy, all potential distractions from the coup de gras that may, or not come to pass. What appears on the horizon Event list of possibilities could be the planned power outages, and Internet take-down. Perhaps the coming take-down of the electric grid in timing with say, a solar event, a lasered one, and the actual hacking of the power grid and Internet at the same time. Yeah, what a ponderation, eh?
But wait! What the heck is going on here? Is this a test of what may come??
“There are a few unique points to take away from this particular attack. The sheer scale of Internet, mobile and cable operators network infrastructure and massive customer base presents an incredibly attractive attack surface. With multiple entry points and significant aggregate bandwidth available make these providers one of the most vulnerable targets for DDoS attacks.”
http://www.securitybistro.com/?p=9047&utm_content=infosecurity&utm_source=twitterfeed&utm_medium=twitter
And since the moves of the dominator's of the evil god-money go forward, this destruction of the free Internet and the imposition of purposely caused hardships on what could amount to be millions of people in regions that are under colder created climates is plausible, we hope it's the kind of thing you sure never ever want to see happen, eh?
Wish it were just ones thoughts. Strangely, according to the whispering Holy Spirit, like minds think alike. Please take a listen to what this good heart has to say towards the end of his report.:
https://www.youtube.com/watch?v=3r1gCS4O7fY&list=UUB1o7_gbFp2PLsamWxFenBg
The tool to use to do it:
http://www.wusa9.com/story/news/local/2014/12/11/spy-drone-hacking-cell-phones-text-messages/20214047/
They say preparation is nine-tenths of the law of Survival. Good family and community comes thereafter. Hold close in your heart, that Higher Law. What the worlds people must know is, the banksters profit from these false flag events and then blame them on others, like in the shoot down of that jet in the Ukraine. Typical stupid shirt. Shoot it down, blame Russia, and keep the real proof hidden until the bigger war breaks out, so it does not matter compared to all the other atrocities those who keep reports like that hidden, have in store for poor worn torn europe.
Gawd! Get a life babylon!! The same old war carp does not work, and everybody knows your evil and end games. Electronic monetary system set up for the victors of war so you can continue to control the world after you take that over what ever is left after the nuklear hollowcost, indeed!
Duhhhh geeee george....there are only two of us left with two large piles of gold shirt that we stole in the greatest shitshow ever conceived in the history of this planet. Duhhh...shall we fight some moar to see who is the last one biological thing to breath on this planet for the next trillion millennia??
Ummm...jus created a new temporary job. Weza call it, auto-neck sizer. Yup! One expert that all the criminals are brung too for their necktie-sizing. “Yeah, this one is a size 5 ½ noose size, next!” Should be pretty bully in the near future.
Let the Spirit of Brotherhood and family gatherings reign over those who pit you against each other. Let Love guide you always. Let not, brothers be pitted against each other as many were in the American Civil War.
https://www.youtube.com/watch?v=Wu4oy1IRTh8
Knowing the Spiritual being we Are IS the reality, it is also easy to know THIS:
There is no conspiracy in the unreality...it is all perfectly planned chaos.
Truth has no left, or right, red or blue, up or down, or 5 minus six is two. It will forever in time immortal stand on it's own self relevance. It is what it is...always has been...and always be immutable in the history books of all nations...and planet histories.
Shoe-bally-wop...shoe-bop-wally...wally shoe bop!
VG
if you are going to be long, don't be clever or obtuse.
Speaking of horse face Kerry I was watching History of the World pt 1 and the scene at Caesars palace where Marcus Vindictus brings Nero treasure. Guy looks just like John Kerry.
http://www.thelin.net/laurent/cinema/films/tt0082517/30321.jpg
He had a short career in film before taking up politics.
Most of the offers were for equine roles.
The current global economy is micro managed to perfection. I don't think this drop in oil prices was in the Fed's plans and I don't think they will play it correctly from here. What happens in the derivative market is far more important than what happens in the real world. Ask AIG. The Fed has to keep all parameters in the green. It only takes a few perturbations to throw the whole system out of whack. The system needs to be in whack or it goes South very quickly.
a drop in oil prices presaged the 1987 rout, the '92 recession, the 2000 internet bubble popping, the 2008 debacle and the 2015 reset.
i should add- a rise in prices in 1973 when the sauds(opec) got mad at the usa for saving israel in the war led to the malaise stagflation of the 70s and the iran hostage crisis put the icing on volcker's raid.
Applause.
http://gailtheactuary.files.wordpress.com/2011/02/recessions-and-oil-spi...
seems other way around
The seventies oil price hike was about the Nixon shock,not about Israel, which was just
political cover.
Apart from that you're right.
Oil waterfall unleashed.
Derivatives no longer a banker problem.
Collars placed on metals price.
Profits ahead of the markets guaranteed by speedy algos.
Perhaps an orderly rise in the physical will be enabled. Perhaps not.
Petro-dollar today buys more oil than many other currencies. Will it's rise end? Remember, the taxpayer now has the bankers back. Another tool has been brought into play. Another currency destruction. More debt comes. Tick, Tick,
from a compass rose of directions
problems will arise on this one...
long seal oil
and walrus blubber...
The pikes in 2008 were what then? Fortunatly it seems at least the oil price is a market price. It seems not one of the traders on either side can manipulate the price as e.g in the stock markets. But anytime I read about a too low inflation, the whole article is to be regarded with highest suspiction. It'a about the current economists which do think inflation is a good thing and that is a simple and plain lie. It's just good for themselves and growing government. Both I see as major problems we currently do have. The Mainstream economists do not have any clue or they are not telling their clues how it comes to such problems. Debts are never ever a problem for them because one can "grow" out of it. That's another plain lie. The only ones who know what's wrong are thos which are never hearde, the Austrians.
We hardly ever had to come to such exaggerations without the states "owning" the money. Nobocy but the austrians do know that. And they are poved right with ever new record debt level or boom/bust cycle. The deutsche Bank ist fully in the mainstream and so I'd see their arguments which more then just a grain of salt.
I'm enjoying the crashing oil prices at the pump right now. I'm going to savor it for a while before I start thinking about the unintended consequences of people rushing out to borrow money for Humvees again.
Hummers are gone.
Look for Ford to resurrect the crown vic.
Bring back the tan Buick!
how about a '77 Buick LeSabre Station Wagon, aka Boat
I miss station wagons. You could camp out in the back, and since they were low they could get better gas mileage than the minivans and SUVs with which Detroit replaced them. I remember when minivans first appeared. I thought, at the time, their big selling point was their height, which allowed you to see over the tops of all the cars, so you could see what lane was moving fastest.
If i HAD to buy a car maker stock it would be TOYOTA .
for some reason i have gm warrants ( hint: not good)
Remember that oil deal Obama made with the Saudis? It wasnt to pressure Russia, it was to wipe out the US shale oil boom.
Yes Oil is crashing but Natural Gas is rughtly stable since 2009 ... Is Russia exporting more Oil or Gas ? I think this crise shouldent effect Russia that much maybe ...
comments wellcomed
Nat gas is priced off of a bbl of oil. because you can't change gas providers if they would want to charge you more, you would have to switch over to an oil heat based system and leave nat gas behind. To prevent people from switching systems yearly to get the lowest cost, they simply adjust the nat gas price off the current bbl of oil to meet in the middle.
Don't you just hate it when they back off QE so you can't buy a gazillion dollars in oil futures to keep the price up? Okay which banker fucked up this time. Jimmy go get the nail gun, this is serious.
Author wrote: "...if oil prices stay where they currently are this appears to be a meaningful headwind for the big oil consuming nations...."
I think he meant TAILWIND, not HEADWIND.
Also, I might think this a "textbook macroeconomic BOOST", rather than a "textbook macroeconomic SHOCK".
Venezuela at 162 B/E....ouch.
Everyone seems to want to see only the silver lining around plummeting oil prices. But as the contrarian might put it, “In front of every silver lining is a dark cloud”. So, despite what Federal Reserve officials Stanley Fischer, Vice Chairman, and William C. Dudley, N.Y Fed President are saying, falling oil prices are not necessarily a good thing.
http://www.globaldeflationnews.com/plummeting-oil-prices-spur-deflation-...
Sorry to bring another (new?) 'ism.
Co-operativism.
Me think that if it was tried on a large scale it might be a solution to our many financial illnesses.
Negative: Possible geopolitical and socioeconomic volitility, hopefully not leading to too much violenc e.
Positive: The 1967 fastback mustang with 351 cleveland block will be come out of the garage more often.