Oil, War, & Drastic Global Change

Tyler Durden's picture




 

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

The first thing that popped into our minds on Tuesday when WTI oil briefly broached $30 for its first $20 handle in many years, was that this should be triggering a Gawdawful amount of bets, $30 being such an obvious number. Which in turn would of necessity lead to a -brief- rise in prices.

Apparently even that is not so easy to see, since when prices did indeed go up after, some 3% at the ‘top’, ‘analysts’ fell over each other talking up ‘bottom’, ‘rebound’ and even ‘recovery’. We’re really addicted to that recovery idea, aren’t we? Well, sorry, but this is not about recovering, it’s about covering (wagers).

Same thing happened on Thursday after Brent hit that $20 handle, with prices up 2.5% at noon. That too, predictably, shall pass. Covering. On this early Friday morning, both WTI and Brent have resumed their fall, threatening $30 again. And those are just ‘official’ numbers, spot prices.

If as a producer you’re really squeezed by your overproduction and your credit lines and your overflowing storage, you’ll have to settle for less. And you will. Which is going to put downward pressure on oil prices for a while to come. Inventories are more than full all over the world. With oil that was largely purchased, somewhat ironically, because prices were perceived as being low.

Interestingly, people are finally waking up to the reality that this is a development that first started with falling demand. China. Told ya. And only afterwards did it turn into a supply issue as well, when every producer began pumping for their lives because demand was shrinking.

All the talk about Saudi Arabia’s ‘tactics’ being aimed at strangling US frackers never sounded very bright. By November 2014, the notorious OPEC meeting, the Saudi’s, well before most others including ‘analysts’, knew to what extent demand was plunging. They had first-hand knowledge. And they had ideas, too, about where that could lead prices. Alarm bells in the desert.

There are alarm bells ringing in many capitals, there’s not a single oil producer sitting comfy right now. And that’s why ‘official’ prices need to be taken with a bag of salt. Bloomberg puts the real price today at $26:

The Real Price of Oil Is Far Lower Than You Realize

While oil prices flashing across traders’ terminals are at the lowest in a decade, in real terms the collapse is even deeper. West Texas Intermediate futures, the U.S. benchmark, sank below $30 a barrel on Tuesday for the first time since 2003. Actual barrels of Saudi Arabian crude shipped to Asia are even cheaper, at $26 – the lowest since early 2002 once inflation is factored in and near levels seen before the turn of the millennium. Slumping oil prices are a critical signal that the boom in lending in China is “unwinding,” according to Adair Turner, chairman of the Institute for New Economic Thinking.

Slowing investment and construction in China, the world’s biggest energy user, is “sending an enormous deflationary impetus through to the world, and that is a significant part of what’s happening in this oil-price collapse,” Turner, former chairman of the U.K. Financial Services Authority, said. The nation’s economic expansion faltered last year to the slowest pace in a quarter of a century. “You see a big destruction in the income of the oil and commodity producers,” Turner said. “That is having a major effect on their expenditure across the world.”

Zero Hedge does one better and looks at 1998 dollars:

The ‘Real’ Price Of Oil Is Below $17

“You see a big destruction in the income of the oil and commodity producers,” exclaims an analyst but, as Bloomberg notes, while oil prices flashing across traders’ terminals are at the lowest in a decade, in real terms the collapse is considerably deeper. Adjusted for inflation, WTI is its lowest since 2002 and worse still Saudi Light Crude is trading at below $17 (in 1998 dollar terms) – the lowest since the 1980s… Slumping prices are a critical signal that the boom in lending in China is “unwinding,” according to Adair Turner, chairman of the Institute for New Economic Thinking.

In fact, while sub-$30 per barrel oil sounds very scary, Saudi prices would be less than $17 a barrel when converted into dollar levels for 1998, the year oil sank to its lowest since the 1980s. Slowing investment and construction in China, the world’s biggest energy user, is “sending an enormous deflationary impetus through to the world, and that is a significant part of what’s happening in this oil-price collapse,” Turner, former chairman of the U.K. Financial Services Authority, said.

But this still covers only light sweet crude. Heavier versions are already way below even those levels. Question: what does tar sands oil go for in 1998 dollars? $5 perhaps? A barrel’s worth of it fetched $8.35 in 2016 US dollars on Tuesday. And that does not stop production, because investment (sunk cost) has been spent so there’s no reason to cut, quite the contrary.

Crude At $10 Is Already A Reality For Canadian Oil-Sands Miners

Think oil in the $20s is bad? In Canada they’d be happy to sell it for $10. Canadian oil sands producers are feeling pain as bitumen – the thick, sticky substance at the center of the heated debate over TransCanada’s Keystone XL pipeline – hit a low of $8.35 on Tuesday, down from as much as $80 less than two years ago. Producers are all losing money at current prices, First Energy Capital’s Martin King said Tuesday at a conference in Calgary. Which doesn’t mean they’ll stop. Since most of the spending for bitumen extraction comes upfront, and thus is a sunk cost, production will continue and grow.

Another interesting question is where the price of oil would be right now if the perception of low prices had not made 2015 such a banner year for filling up storage space across the globe, including huge amounts of tankers that are left floating at sea, awaiting a ‘recovery’. But that is so last year:

Tanker Rates Tumble As Last Pillar Of Strength In Oil Market Crashes

If there was one silver-lining in the oil complex, it was the demand for VLCCs (as huge floating storage facilities or as China scooped up ‘cheap’ oil to refill their reserves) which drove tanker rates to record highs. Now, as Bloomberg notes so eloquently, it appears the party is over! Daily rates for benchmark Saudi Arabia-Japan VLCC cargoes have crashed 53% year-to-date to $50,955 (as it appears China’s record crude imports have ceased). In fact the rate crashed 12% today for the 12th straight daily decline from over $100,000 just a month ago…

China imported a record amount of crude last year as oil’s lowest annual average price in more than a decade spurred stockpiling and boosted demand from independent refiners. China’s crude imports last month was equivalent to 7.85 million barrels a day, 6% higher than the previous record of 7.4 million in April, Bloomberg calculations show.

China has exploited a plunge in crude prices by easing rules to allow private refiners, known as teapots, to import crude and by boosting shipments to fill emergency stockpiles. The nation’s overseas purchases may rise to 370 million metric tons this year, surpassing estimated U.S. imports of about 363 million tons, according to Li Li, a research director with ICIS China, an industry researcher. But given the crash in tanker rates – and implicitly demand – that “boom” appears to be over.

The consequences of all this will be felt all over the world, and for a long time to come. All of our economic systems run on oil, so many jobs are related to it, so many ‘fields’ in the economy, and no, things won’t get easier when oil is at $20 or $10, it’ll be a disaster of biblical proportions, like a swarm of locusts that leaves precious little behind. Squeeze oil and you squeeze the entire economic system. That’s what all the ‘low oil prices are great for the economy’ analysts missed (many still do).

Entire nations will undergo drastic changes in leadership and prosperity. Norway, Canada, North Dakota, Russia. But more than that, Middle East nations that rely entirely on oil, a dependency that won’t allow for many of their rulers to remain in office. Same goes for all OPEC nations, and many non-OPEC producers.

We can argue that a war of some kind or another can be the black swan that sets prices ‘straight’, but black swans are supposed to be the things you can’t see coming, and Middle East warfare for obvious reasons doesn’t even qualify for that definition.

The world is full of nations and rulers that are fighting for bare survival. And things like that don’t play out on a short term basis. For that reason alone, though there are many others as well, oil prices will remain under pressure for now.

Even a war will be hard put to turn that trend around at this point. Unless production facilities are destroyed on a large scale, war may just lead to even more production as demand keeps falling. The fact that Iran is preparing to ‘come back online’, promising an even steeper glut in world markets, is putting the Saudi’s on edge. Rumors of Libya wanting to return for a piece of the pie won’t exactly soothe emotions either.

And when, in a few years’ time, all the production cuts due to shut wells become our new reality, and eventually they must, then no, there will still not be an oil shortage. Because the economy will be doing so much worse by then that demand will have fallen more than supply.

Barring large scale warfare in the Middle East there is nothing that can solve the low oil price conundrum. But think about it, which Gulf nation can even afford such warfare in present times? For that matter, which nation in the world can?

The US may try and ignite a proxy war with Russia, but that would lead to an(other) endless and unwinnable war theater. Which would carry the threat of dragging in China as well. The US and its -soon even officially- shrinking economy can’t afford that. Which of course by no means guarantees it won’t try.

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 01/15/2016 - 22:06 | 7053859 dchang0
dchang0's picture

Oil that cheap and gasoline is still over $3/gallon in Southern California for regular unleaded--all thanks to regulation choking the supply down to just a handful of refineries. I guess gasoline-related jobs will be just fine in Calif. while the average consumer still suffers.

Sat, 01/16/2016 - 03:07 | 7054420 Kassandra
Kassandra's picture

I was wondering why I'm paying 2.35.

Highway robbery.

Sat, 01/16/2016 - 04:51 | 7054457 zhandax
zhandax's picture

More like squeeze oil and you squeeze the central bank's bullshit.  As noted "All of our economic systems run on oil".

Sat, 01/16/2016 - 15:48 | 7055720 11b40
11b40's picture

Filled up for $1.61 in Anderson, SC yesterday on the way home from the Atlanta Gift & Home Furnishings Show. And by the way, the show was jammed the first 3 days, with plenty of optimism from buyers. It is a better start than I expected, but the year is new, and Q1 sales could easily run off the rails.

Fri, 01/15/2016 - 22:07 | 7053865 ebworthen
ebworthen's picture

Oil is becoming the fuel of food production; not just S.U.V.'s, Semi's, and Planes.

Increasingly mechanized agriculture means oil; if you think people will go to war over oil, just wait until you seem them go to war over food!

Fri, 01/15/2016 - 22:59 | 7054015 Joe A
Joe A's picture

Let them eat oil.

Fri, 01/15/2016 - 23:40 | 7054102 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Exactly. Breathtaking how often people forget the human race eats oil.

Sat, 01/16/2016 - 01:00 | 7054247 trulz4lulz
trulz4lulz's picture

The exact wrong kind of oil for the most part. Lets say if i wanted to take advantage of this situation. What is a good time to btfd? $15.....doea it have a better chance of going to $0 or $30.....?

Sat, 01/16/2016 - 10:02 | 7054793 Dark Daze
Dark Daze's picture

Well, here's the thing. They grow an awful lot of rice in South East Asia, China and Japan and none of that involves oil. I go to a farmer's market where I live and buy a weeks worth of organic vegetables and fruit for 15 bucks, and none of those use oil - they are grown by hand, by small farmers, with hoe's and rakes, and delivered by horse cart. No shit.

Yes, in the wheat/corn culture that has evolved out of the population of the America's, oil is 'needed', at least if you intend to continue producing mass quantities of it. You most certainly can not farm 10,000 hectares of wheat by hand, at least not without a lot more people. They used to though you know. Right up to and including the period just after WWII planting, harvesting and threshing in most of eastern Europe was ALL done by hand.

Sat, 01/16/2016 - 10:50 | 7054864 459873255
459873255's picture

Oil HAS been the fuel of food production for 80 years. Since the advent of the modern farming tractor (and the tractor bust that set off the Great Depression) we have been putting our seeds in the ground and harvesting the output with diesel fuel. The whole food supply chain is driven by diesel fuel. This applies to meat production as well. We feed the cows corn that was grown and harvested by John Deere diesel machines. Bread and cirsuses for the masses is run on diesel. The uptick in diesel fuel costs for the last 15 years has just meant larger and longer loans on farm equipment. It will take some time for all this credit to mature but when it does a major source of the price of food will have evaporated, the fuel cost. The deflationary event be painful everywhere, but at least we are sending billions less to degenerate regimes in the ME.

Fri, 01/15/2016 - 22:30 | 7053872 ThroxxOfVron
ThroxxOfVron's picture

TOTAL BULLSHIT.

THE PRICE OF OIL WAS NEVER ABOVE $40 PRIOR TO 2004.

http://www.macrotrends.net/1369/crude-oil-price-history-chart

EVEN ADJUSTED FOR INFLATION: OIL WAS NEVER ABOVE $40/BBL PRIOR TO 1971.

http://www.macrotrends.net/1369/crude-oil-price-history-chart

PEOPLE HAVE BEEN GOUGED & ROBBED BY GREEDY FUCKING PETRO-DICTATORS & THE MONEY PRINTING BANKSTERS & ASSOCIATED SPECULATORS.

THIS IS A REVERSION TO MEAN & NOTHING MORE.

STOP THE FUCKING COUNTERFEITING & PROPPING PETRO-DICTATORS & THE PRICE WILL STABILIZE.

Fri, 01/15/2016 - 22:51 | 7053999 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Thank you, people think it's about the numerator (barrels) and has nothing to do with the denominator (per dollar), the question is not "why has it come down from $140?" but "what was it doing at $140 in the first place?"

Sat, 01/16/2016 - 06:27 | 7054551 Sudden Debt
Sudden Debt's picture

It was the creation of the ICE that led to a increase of the oil price.

But the above bullshit article should be read with a bucket of salt.

 

An example is missing. Venezuela. They had a modern infrastructure but nationalisation led to less investments and production fell off a cliff.

Lybia, same thing.

And it takes about 5 year to build a large oil production plant and 20 years to build a refinery.

NONE of these investments are being done these days. EVerything has been shut down for over 2 years now.

These things are all well build and that's why we keep using them at 100% to have as much revenue as possible to pay the debt but once the wells go into decline... expect a world of missery and hurt.

To understand prices today, one needs to understand the oil industry. Maybe 5% who work in it understand it. And that's not the hardhats, engineers who do the dirty work, it's the investors and traders.

And I've said it already a few times, a lot of people cheer when others go broke and don't make money. They're mostly to stupid to understand that  it's the reason why they make less also but their world is to small to understand that.

We live in a interconnected world and when 1 part breaks down, it drags all the rest with it down.

 

So when you see somebody cheer: YAH! CHEAPER OIL! He's actually telling that he's glad all of us deserve less wealth.

But as there's more dumbed down people in the world than smart people...

 

Most people don't have an idea on how we use oil, oil isn't just to fill up your car.

Sat, 01/16/2016 - 12:36 | 7055157 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

im just happy due to the volatility!

Sat, 01/16/2016 - 04:46 | 7054478 Factsruletheworld
Factsruletheworld's picture

Hey Throxxofvronn..... do you have your own web-site or blog.  Of all the people I have read on here about this topic you seem to make WAY the most sense.  Could you post a link?  Cheers.

Sat, 01/16/2016 - 04:46 | 7054479 Factsruletheworld
Factsruletheworld's picture

Hey Throxxofvronn..... do you have your own web-site or blog.  Of all the people I have read on here about this topic you seem to make WAY the most sense.  Could you post a link?  Cheers.

Sat, 01/16/2016 - 10:48 | 7054883 459873255
459873255's picture

Subsidizing the petro-dictators is a symptom of the problem of the excess debt creation. All the fiat money spewing from the central banks debt production naturally sought out one of the major sources of real energy production, oil. A gallon of diesel in a machine replaces hundreds of hours of back breaking labor. It took years for the fiat money to filter it's way down the chain to the oil producers. Once the speculators figured out "no oil, no production" they bid the price of oil to the moon and the backward ME cultures suddenly had enough $$ to buy weapons, start wars, and push their destructive culture on everyone else.

Sat, 01/16/2016 - 12:06 | 7055078 Seer
Seer's picture

I agree that the turmoil has to do with the lack of stability, BUT, there's really no such thing as "stability" given change/entropy is always in play.  It's  really about control, and, clearly, CONTROL is being lost.

But I digress... ALL is premised upon the notion of perpetual growth, and growth is the thing that's evaporating (based on economic trickery of pulling growth from the future- we've bilked it for all it had).  And while our economic systems "tell" us what we have done/are doing, they themselves are but instruments of our mind; meanwhile the "real" world (for which we seem to have lost sight of) is incapable of keeping up with or requirements of growth.

Decades ago I'd engaged in conversations about oil pricing.  I said that the price itself wasn't really the important thing, that what mattered was affordability.  Someone above spoke about Asian rice farmers not using oil to produce/harvest/deliver rice- consider that this isn't a recent thing, that it's been this way for a LONG time, regardless of oil prices!

Back to "price stability"... If our economic systems are predicated on growth then prices cannot be "stable."

Sat, 01/16/2016 - 12:33 | 7055145 MalteseFalcon
MalteseFalcon's picture

Nailed it Throxx.

I'd add that it was all buttressed by the peak oil myth.

Sat, 01/16/2016 - 13:27 | 7055304 Seer
Seer's picture

"I'd add that it was all buttressed by the peak oil myth."

So, you do not beleive that there will ever be a peak in oil production?

Thu, 01/21/2016 - 11:56 | 7077511 MalteseFalcon
MalteseFalcon's picture

Any peak in oil production is irrelevant as by the time it happens, we will have moved on to better energy sources.

Peak oil was first propagated in the mid 1970s.

I'm right so far.

Check.

Fri, 01/15/2016 - 22:12 | 7053886 A Lunatic
A Lunatic's picture

Where's my .99/gal gasoline.....?

Fri, 01/15/2016 - 22:22 | 7053908 zerotohero
zerotohero's picture

Dark days a comin folks - may you and yours prepare and survive

Fri, 01/15/2016 - 22:25 | 7053922 Frederic Bastiat
Frederic Bastiat's picture

So if the economy is great at $100 oil, it should be better at $1000 oil or $100x...x oil, right?! Dumb. We want oil cheap. I mean what if we suddenly found 10 quadrillion barrels of it just sitting in a lakes across the world, just waiting for us to syphon it out at essentially 0 cost? Would that be bad somehow?? 

Fri, 01/15/2016 - 22:39 | 7053967 ThroxxOfVron
ThroxxOfVron's picture

Yep.  That's the big lie being constantly repeated.

As if discovering cheap plentiful energy would mean that we would all starve and freeze to death!

They might as well try to tell us that if manna henceforth fell from heaven like rain that it would result in famine and mass exinction.

The problem isn't with energy -it is with money.

The World has plenty of oil and even more alternatives to oil being developed and to be developed.

The Petro-dollar is a vehicle of neo-feudalist oppression.

 

Fri, 01/15/2016 - 23:13 | 7054045 new game
new game's picture

The Petro-dollar is a vehicle of neo-feudalist oppression.

 backed by the________ and enforced by the_____________.

now go to the front of the class and put that fucking gold star on your forhead. look in the mirror and say over and over, "we are fucked unless we get the the cahunas to deal with these mutherfuckers".

stacken 9

good night on that...

 

Fri, 01/15/2016 - 23:22 | 7054065 back to basics
back to basics's picture

I think you are missing the point.

It's not cheap oil that's causing the problem and the turmoil in the markets, it's all the outstanding debt that was created thinking oil would always be $100 a barrel or heading higher.

Oil is no longer that price so these over leveraged entries are blowing up, laying off a lot people who earned high wages, stopping capex which in turn causes turmoil and layoffs in the entire supply chain, and last and most important, these defaulting loans (which had been extended and pretended several times hoping for the price to rebound) are starting to leave huge holes in bank balance sheets. And we are where we are...

It's not cheap oil that's the problem, it's malinvestment from central bank cheap credit largesse and the financialization of the economy that's the problem. And THAT problem is real.

Fri, 01/15/2016 - 23:22 | 7054069 ThroxxOfVron
ThroxxOfVron's picture

What part of "The problem isn't with energy -it is with money. " did you NOT understand?

Fri, 01/15/2016 - 23:31 | 7054089 back to basics
back to basics's picture

Bollocks.

Nice generalization by saying money is the problem (I think we all know on here that fractional reserve banking system is the real issue) but you are still missing the point with low oil prices, which you seem to have missed in each and every one of your posts.

Which part of that didn't you understand, or was it just a case of me hurting your feelings?

Sat, 01/16/2016 - 00:58 | 7054108 ThroxxOfVron
ThroxxOfVron's picture

My feelings aren't hurt in the least by half-assery posted on the interwebs.

 

I've already explained the dynamics of counterfeiting money that is by definition supposed to be tied to energy output more times than I care to recall.

Petro-Dollar should equal Calorie-Dollar.

Counterfeiting, and worse -pyramiding phantom usury charges and imbedding ever larger speculative toll charges and rents onto the ledgers of accounting of the 'money' that is supposedly a proxy for a measured caloric quantity, is both completely criminal and ultimately unsustainable.

...& has NOTHING to do with scarcity or the lack of the energy source itself.

 

Sat, 01/16/2016 - 01:09 | 7054265 trulz4lulz
trulz4lulz's picture

Humans are an exchange of energy; money makes it personal. Personality projects itself onto the environment. Energy should never be used to create money....i could wax poetical for hours on the subject.

Sat, 01/16/2016 - 01:27 | 7054284 ThroxxOfVron
ThroxxOfVron's picture

ALL exchanges are effectively exchanges of energy.

Even abstract concepts have a basis in caloric energy expenditure at the neuralogical/nervous system level.  

Neurological impulses are micro-electrical currenct pulses.

Thermo-dynamics people, thermo-dynamics...

WE are biological mechanisms running on caloric transmutation, exchanges of energy.

Calories are the basis of function; the true unit of account for ALL activity at all levels from the sub-atomic to the galagtic, in both organic and inorganic 'exchanges'...

 The Process is The Product.

Sat, 01/16/2016 - 01:31 | 7054308 trulz4lulz
trulz4lulz's picture

Indeed!!! A truely splendid process!! I feel as though humans for the most pary have lost the appreciation for the abstract mind fuck of it all. Im astonished to this day at the profundity of it all....still cant quite wrap my head around it. I for one hope i never do; that is to say if i ever get another chance to take it all in from this perspective.....anyway....yeah...oil....money...what trivial things..

Sat, 01/16/2016 - 10:30 | 7054851 KesselRunin12Parsecs
KesselRunin12Parsecs's picture

Down with the fatties! -lol

Sat, 01/16/2016 - 09:04 | 7054700 Cloud9.5
Cloud9.5's picture

Linier thinking got us into to this.  When we started steam cleaning sand for bitumen and calling it oil, there was a phase shift in the energy sector.  The drop in production in places like the North Sea and Alaska caused the linier thinkers to conclude that the price of bitumen and kerogen would go parabolic due to the never ending growth paradigm. What they did not realize was that the high price of oil and oil substitutes would drive a stake in the heart of the economy causing a contraction that would in turn kill demand.  I was one of those linier thinkers.  I thought oil prices would go parabolic and continue to rise right up until the point supply chains broke.  What I did not envision was a collapse taking place in market awash in oil brought about by a collapse in demand.

 

 

Guys, look around.  The mom and pops went out of business years ago.  Now Walmart is closing stores.  Look at what is happening in Canada.  The chaos on the periphery of the empire will in time migrate to the core.  Buckle up.  We are now in a new normal.

Sat, 01/16/2016 - 10:14 | 7054778 Dark Daze
Dark Daze's picture

It spelled 'linear' and for the 1,000'th time, oil and gas are only 6.5% of Canada's GDP. Calling Canada's dollar a commodity currency is merely part of the grand manipulation that goes on. In a 1.8 Trillion dollar economy, 6.5% is only 110 Billion dollars, that is peanuts. Now I grant you that an awful lot of jobs went along in producing that 110 B worth of product, and that is an issue, but nothing we can't deal with. Hell, the Bank of Canada alone has over 80 Billion US (or 1 years worth of oil production) in cash reserves.

Sat, 01/16/2016 - 10:16 | 7054821 Cloud9.5
Cloud9.5's picture

You are correct.  My dyslexia gets in the way sometimes and my spell checker does not differentiate between synonyms and homonyms. It is most prominent when I am not fully awake and when I am extremely tired.  Still, a misplaced word does not make what I posted false.  It is however a good tool for those who wish to discredit a post that does not support either their book or paradigm.

Sat, 01/16/2016 - 13:28 | 7055300 DCFusor
DCFusor's picture

Far from the worst errors in spelling or grammar I see here.  Ok, one error - typo, bad hair day, fine.

But increasingly here, I see tons of gross errors by people who evidently type in "caucasian-bonics" - it's obvious as crap they're not "readers" and are just spelling phonetically at best, grammar horrible.  I am at a loss to find a way to take seriously someone who doesn't speak their own language (yeah, I cut slack to those who are obviously not native English speakers when they make mistakes obviously tied to their native usages).

People - loose is the opposite of tight, not win...but if I begin a list here, the post will become almost infinite in length and I'll lose my point.  OK, I can cut some slack for those who can't tell affect from effect, but not a hell of a lot; go read some books, learn your own damn language.  If you can't proplerly write in the language you use all day every day, how am I supposed to believe you can know shit about your complex philosphy, prognostications, expications and so forth?  I can't.  So many here proclaim they know what's wrong with things, some fewer claim to know a solution, yet almost no one can even write the language we all share here?  Really?

I admit, I did get a laugh when someone used exasperate to mean exacerbate the other day.  But really, if one is going to go on about how expert one is, but wouldn't have passed 5th grade English when I took it - it's hard to take people seriously.  (and I don't mean you, Cloud - I wish it were only one, and one mistake, but it's rampant)

And I'll get the grammar Nazi ad-hominem, I'm sure.  Fuck you.  You want to seem like the smartest person in the room?  Then learn to speak like one - that works even if you aren't the smartest, in my experience.  Perception matters.  No one will bother to listen to your message if you can't be bothered to even express it correctly.  You may as well be broadcasting AM modulation on the FM band.  Actually, that'd be better, because then I couldn't hear it at all.

I want one'a them readers...Henry Rollins: https://www.youtube.com/watch?v=W9S5-EB8dR8

Sat, 01/16/2016 - 16:12 | 7055779 11b40
11b40's picture

What, pray tell, are your 'expictations '?

While I do largely agree with your point, and I am one of the Neanderthals who would like to see Captcha return to the site, throwing stones in glass houses does come to mind. ;-)

Sat, 01/16/2016 - 11:43 | 7055010 Sparkey
Sparkey's picture

Wishful thinking, it is that last %6.5 that makes the difference, take that out and you've got a whole lotta adjusting to do, and a lot of pain to feel!

Sat, 01/16/2016 - 12:17 | 7055115 Seer
Seer's picture

Beat me to it!

When we're running on a mere few percentages of growth to maintain this entire shit-show then anything that is NOT above ZERO will cause holy hell.

As those tar sands operations collapse it'll pull the rug out from Canada's banking sector via losses on mortgage loans.

What so many Canadians fail to realize is that their housing bubble WILL burst and that, unlike in the US when it was mostly the housing sector itself that was the cause, it will happen at the same time that another sector -oil sector- blows out.  Yup, a two-fer here.

CAD/USD = $0.69 USD.  They were on par with each other back in 2012.

Fri, 01/15/2016 - 23:39 | 7054100 Jay
Jay's picture

Illargi's own charts disprove the point he's trying to make. Did the economy collapse when oil prices were low in the past?

Sat, 01/16/2016 - 01:25 | 7054271 ThroxxOfVron
ThroxxOfVron's picture

Because Illargi missed the fucking point entirely.

The caloric energy value of the oil did not change -the rate of emission of the unit of measure for accounting for it and the costs associated with the financialization of it did.

The money/unit of accounting for the caloric/energy output of the oil was debased an confounded with derivatives.

The 'marginal value of debt' and 'inflation' have nothing to do with calories/energy and everything to do with compounding usury and rents pyramiding.

 

ENERGY IS THERMODYNAMICALLY DEFINABLE.  

CALORIES ARE CALORIES.

'MONEY' IS NOT.  

'MONEY' WITHOUT A BASIS FOR MEASURE IS NOT DEFINABLE.

IMHO: 'SOUND MONEY' = STATIC UNIT OF ACCOUNT RATIO TO DELIVERABLE CALORIC/ENERGY OUTPUT. 

NO ONE CAN COUNTERFEIT CALORIC OUTPUT.

PERIOD.

Sat, 01/16/2016 - 01:34 | 7054314 trulz4lulz
trulz4lulz's picture

FREE NIKOLI TESLA!!!!!! Your post made me happy!! Well done!!!

Sat, 01/16/2016 - 02:02 | 7054354 ThroxxOfVron
ThroxxOfVron's picture

I think about Tesla often...

IF Tesla had succeeded in harnessing the energy via engaging the magno-sphere/?/solar wind transfer function of the World we would ALL be living in a completely different set of economic and social paradigms.

It is my intruition that eventually the Sun will be likely harnessed one way or another, either via tapping the magnetosphere or via vast solar arrays beaming some frequency band of energy to terrestrial receivers.

At that point I imagine that most manufacturing, probably even the growing of foodstuffs, would be done on the Moon and/or on nearby space stations.

Mankind could focus on the health and happiness of human existance, on preserving nature and protecting the bio-sphere, so much more...

 

We ARE history's middle children.

We know the present system is not sustanable -or equitable.

We know in our hearts we can do better for ourselves and the World.

Our grand posterity awaits.

Our TRULY GREAT accomplisments seem imminent even as we struggle amongst Ourselves.

The Era of Humble Pride in stewardship of natural beauty and biological diversity awaits.

I do believe that WE have a responsibility to both Ourselves and to the Other Denizens of this planet.

We are SO fucking close...

Sat, 01/16/2016 - 03:15 | 7054427 Kassandra
Kassandra's picture

Perhaps, in a parallel universe, we have already done so.

Sat, 01/16/2016 - 04:33 | 7054466 Which way to th...
Which way to the beach's picture

And in a parallel universe Ringo Star can actually drum

Plagiarized Red Dwarf  quote "Sarc on standby Holly"

Bubbles


Sat, 01/16/2016 - 06:22 | 7054544 KesselRunin12Parsecs
KesselRunin12Parsecs's picture

'WE', gotta machete our way thru a jungle of Ashkenazi's and Bilderbergers first before any of that will happen.

Sat, 01/16/2016 - 04:49 | 7054485 buttmint
buttmint's picture

Throxx...

spot on!

Sat, 01/16/2016 - 06:13 | 7054539 MSimon
MSimon's picture

The poor EE student (C average) knows more about LCR circuits than Nikola Tesla ever did. His misunderstanding of LCR circuits lead to his illusions about "free energy".

 

Tesla was obviously brilliant (3 phase motors). But there were holes in his understanding.

Do NOT follow this link or you will be banned from the site!