Saturday, October 8, 2011

Oil vs. Wages

Click to enlarge.

This chart shows the dollar value of U.S. oil consumption divided by the dollar value of U.S. wage and salary disbursements (through July).

October 5, 2011
Anthony Mirhaydari: This 'bear' market won't last

All this negativity and fear is unsustainable.

As of 2004, I am firmly planted in the sustainable fear camp.

Source Data:
EIA: Product Supplied
EIA: WTI Spot Prices
St. Louis Fed: Wage and Salary Disbursements


Troy said...


people with a weimar hypothesis really need to follow the money in that scenario.

hint: it goes from wage earner to rentier.

The average annual consumption is 1100 gallons/household. $3 more at the pump just wipes J6P out.

Macro people really don't have a clue how the economy works it seems. Maybe I'm wrong, all I know about macro is what I read on the internet.

Stagflationary Mark said...


We'd have to live in a cave to not see what high oil prices do to our economy.

Mr Slippery said...

I was going to post a long rant on punching that clown from MSN, but it was too long so I posted the clown punching here.

fried said...

"Now, we've got the wind at our backs. Industrial commodities like copper and crude oil are dropping rapidly -- easing inflationary pressures and boosting corporate profit margins and consumer spending power. Real interest rates are deeply negative. Central banks are extremely accommodative. And talk of fiscal stimulus has returned to Capitol Hill."

Seriously? This is an economy ready to sail forth? I had to read the whole link. China is expected to show slowing growth again, with data available tomorrow. Europe can't decide which parachute string to pull on the solution which they are discussing at a meeting to set up a meeting to discuss the construction of the parachute they will need to implement to discuss...or something. The lower 80% of Americans are flat broke, maxed out, and quite possibly unemployed or fearing job loss.
And the ongoing OWS protests have quite possibly made it politically impossible to stage another QE...
remind me never to go sailing with this chump.

Troy said...

Earlier I've posted my perplexion at how the mid-90s economy recovered as it did. shows that household debt didn't get out of hand in the 1990s, any more than the 1980s at least.

But this graph:

<a href="'></a>

shows financial sector debt doubling between 1990 and 2000.

Clearly that is a piece of the puzzle.

Curiously, there was a similar doubling s-curve in that graph in the 1980-1990 period, too.

I don't know what this graph really represents, but it does show deleveraging . . . of something!

Renting now, my great fear is to wake up some day and see home prices having doubled, like they did 1995-2000 in the bay area.

I don't know how that is going to happen, but if the system can find a way they will.

Stagflationary Mark said...

Mr Slippery,

"It's time for Daddy to make some funny."

Stagflationary Mark said...


...remind me never to go sailing with this chump.

Never go sailing with that chump. ;)

Stagflationary Mark said...


Link fixed.

Renting now, my great fear is to wake up some day and see home prices having doubled, like they did 1995-2000 in the bay area.

If a house for sale up the street is any indicator, you will be safe for a while. It was on the market. It was off the market. It is on the market. It's pretty sad when the flyer says that it is not a short sale in a big font.

Wisdom Seeker said...

Wish you could extend the Oil/Wages graph a few decades to the left...

Stagflationary Mark said...

Wisdom Seeker,

Me too! There just wasn't enough data though.

I'd sure like to know why Blogger thinks your comments are SPAM. Seem pretty darned SPAM free to me.