Investor Hopes for Rising Oil Demand Aren't Borne Out by Reality
As an investor, rising oil demand is exactly what I'm hoping for. I rank it right up there with a sharp poke to the eye and a swift kick to the gut. What can I say? I LOVE PAIN!
You know what else I'm hoping for? A stranger. Strangers are cool. Strangers give me free candy.
In the future, cities will become deserts... roads will become battlefields... and the hope of mankind will appear as a stranger.
Unfortunately, apparently the "hopes for rising oil demand aren't borne out by reality", at least not yet.
I guess I'll just have to pin my "hopes" on something else. But what could it be?
I know! We could just take on more and more debt to make it seem like the economy is humming along like a well "oiled" war machine! Debt could create a never ending illusion of prosperity! Genius!
Stag,
ReplyDeleteSome think we have "humongous" budget problems. Others think the the budget problems are actually a solution as they unquestionably require more debt and are "off" budget. I'm sure the astute readers of this blog can understand the critical distinction.
http://en.wikipedia.org/wiki/United_States_public_debt#Recent_additions_to_the_public_debt_of_the_United_States
From the above link:
There is a significant difference between the reported budget deficit and the change in debt. The key differences are: 1) The Social Security surplus, which reduces the "off-budget" deficit often reported in the media; and 2) Non-budgeted spending, such as for the Iraq and Afghanistan wars.
It seems we can afford anything as long as it is "off" budget. If we apply that accounting to household budgets, we're all in tip top financial shape.
Something else to CONsider. The fed has taken "off" budget accounting to a new level with the announced $1.75 trillion in GSE & treasury purchases. That's some serious money laundering. I call it "credit purification".
Given that the last reflation was so successful in CONcentrating wealth, I can't wait to see the results of the current reflation efforts. We should have a king in no time.
Oils well that ends well.
Stag,
ReplyDeleteThe author (John Taylor) of the folowing FT article was Hussman's Phd prof @ Stanford. He also developed the "Taylor Rule".
http://www.ft.com/cms/s/0/71520770-4a2c-11de-8e7e-00144feabdc0.html?nclick_check=1
http://en.wikipedia.org/wiki/Taylor_rule
In my view, 100% inflation would be ruinous for the prudent.
mab,
ReplyDelete"We should have a king in no time."
Well, the taxpayer has been taking a royal ***king since the crisis began!
The mystery word is "banking" of course. What did you think I meant?
I'm willing to keep my language in check as long as my life savings "appears" to be safe. I've long since given up on the idea that it is safe though.
The ***king is dead! Long live the ***king!
This economy is a royal pain in my asterisk.
mab,
ReplyDelete"In my view, 100% inflation would be ruinous for the prudent."
After taxes on my TIPS, it would be roughly 17% ruinous to me each and every year.
If the inflation is sustained, expect me to start a new blog related to the financial industry that got us into this mess.
Our ***king Economy!!
Since our economy now requires massive and unsustainable credit expansion, it isn't all that hard to see what's going to happen next (or at some point). Most bears are simply debating the details.
So far, the bull vs. bear debate has been far more important than the inflation vs. deflation debate. So far. That could change.
"They come mostly at night. Mostly." - Newt, Aliens II (if memory serves)
You know Mark watching these corrupt Keynesian fools moon-launch the commodity bubble again, throw the indebted masses under the inflation bus as unemployment is skyrocketing and turn an insolvent banking system into an insolvent country is an amazing thing to behold. I'm starting to think each bubble now has a half life of the last one so if the last one lasted 4 years this one will only last 2 years. I think sooner of later no mater how much they try to inflate it has just the opposite reaction. I could be wrong how knows anymore stranger things have happened.
ReplyDeleteKevin
"Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.
ReplyDeleteHis answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.
http://globaleconomicanalysis.blogspot.com/
Unlike in America they teach basic math in China. The numbers no add up round eyes....... Ha ha ha
Kevin
Kevin,
ReplyDelete"I'm starting to think each bubble now has a half life of the last one so if the last one lasted 4 years this one will only last 2 years."
"Chinese assets are very safe."
Radioactive assets are safe if contained, otherwise there will be serious fallout. Sigh.
Mark,
ReplyDeleteThe radioactive assets are being rounded up and contained on the FED's balance sheet which is heading for 3 trillion and counting. Of course sooner or latter they will be transfered to the taxpayers balance sheet but that is after any recycled material that has any value is separated from the sludge.
Sigh.
Kevin
I have this idea that when the oil runs out (not before every possible cent is extracted from people) some government will unveil a perfect power source and all will be so happy they are saved no one will care that we got jobbed.
ReplyDeleteNever underestimate the public's ablility to have a 5 minute memory!
Great blog as usual Mark!
GYSC,
ReplyDelete"Never underestimate the public's ablility to have a 5 minute memory!"
I read something just like that 6 minutes ago! For the life of me I can't remember what it was though. Hahaha! ;)
By the way, Mr. Fusion is theoretically possible. Slap a few of them on mining equipment and you've got productivity miracles the likes of which even God has never seen.
Did I mention that my name is a killing word?
The stagflationist has awakened!
Sorry, got caught up in Dune there for a moment.