Monday, June 26, 2017

Good To The Last Drop

Eating Seed Corn,

"The Dynamics of Depletion" looks again at something which is counter-intuitive, how gas/petrol can be cheap, when the economy is grinding down, and there is plenty of oil, and no more oil exploration.
We have economic models based upon equilibrium, and we are used to lumping the costs and payoffs in one pot and sort of leaving time out of it. It's a lot easier than trying to calculate uncertain time lags on everything, which is what really happens.
Credit based money is hard t understand, and does a very good job of obscuring the real dynamics. That serves the ruling class, as a rule.
The economy we have grew up on oil that was cheap to extract.
The price of oil went up with costs until the 2008 financial collapse. Costs of exploration and extraction were rising, and companies raised prices to stay in the black, up to $140/bbl. The system collapsed, and became wholly based upon central bank interventions and promises for the rosy future.
With interest rates near zero, oil was seen as an excellent investment, so lots of money was shunted into it, especially shale, but all the profits were in the future. Then in late 2014 the oil prices dropped again, and they have stayed down, and all the profits are still in the future. There's no exploration to speak of.
This puts the fossil fuel economy in terminal decline, and the cookie jar empty.
What is observed here is what I have also noted, the rich have to take the huge losses, because they have the huge imaginary portfolios. We will all have to endeavor to scrape by much more efficiently, more like the Flintstones than the Jetsons. 

Trump wants to sell oil leases in the Arctic National Wildlife Refuge. There is apparently a super-giant oil and gas field under it. The oil-majors are keeping secret the results of the one test well drilled long ago. How can it not get pumped?

The Fed announces that they will raise interest rates, and/or tighten policy through unwinding QE (ceasing to roll-over assets when they mature, marketing them, instead) until asset prices start falling. 
Personally, I think global central banking has gotten positioned for the long deflation. They will no longer collect interest, but they will take position of assets, everything of value. This is like the 1800s strategy. Bankrupt borrowers and take their farms.

The Bank for International Settlements states that years of record low interest rates have set the world up for a big crash when rates are raised, as they currently recommend. That's not a bug, it's a feature Bankers rule.

Charles Hugh Smith looks at the date a hedge fund executive has set for the stock market crash, Valentine's Day 2018. It's as good a date as any. Charles looks at the psychological steps that take place in the classic head-and-shoulders collapse of asset prices here.

Julian Assange says the Democratic Party is doomed by the financially-captured establishment, which serves no purpose but it's own, and that of the financial masters. People with real democratic leanings will have to form a new Democratic party, along the populist lines that Bernie Sanders was presenting. (Those lines may move a lot by 2020.)

Monsanto and Bayer (now merged) seem to have a strategy to take over the marijuana market. (I suspect they found a way to make pot addictive, too.)

This study comparing pot smokers and non-smokers in California and Colorado finds that the pot smokers are happier, healthier, richer, more likely to volunteer in their communities, and have a lot more masters degrees. (Do you think that's because these are the people who care to take the whole route to legal marijuana, with all the time and expense? Pot doesn't make you educated, rich or happy.)

Disgruntled Populist

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