Posted on 12/13/2014 5:58:18 AM PST by bestintxas
We all know that the American energy revolution, led by the new technologies of hydraulic fracturing and horizontal drilling, has created a flood of new shale-oil and natural-gas production that has overwhelmed world markets and driven prices down by roughly 40 percent. End-of-week crude oil closed near $57 a barrel, and the national average gasoline price finished at $2.60.
No matter what the naysayers are trying to sell, the new energy reality is unambiguously good for the U.S. and global economies. There may be some dislocations among countries, sectors, or companies, but the overwhelming impact is positive.
In fact, the U.S. economy is already getting better. Recent numbers on jobs, retail sales, consumer confidence, small-business confidence, ISMs, and business investment point to a 3 percent growth rate rather than the tepid 2 percent pace of the prior five years.
And it’s likely that oil prices will stay low or drop a bit lower.
The International Energy Agency’s new forecast for 2015 shows a global reduction in demand growth of 900,000 barrels a day versus a previous projection of an increase of 1.1 million barrels a day.
(Excerpt) Read more at nationalreview.com ...
They do not necessarily go for roads and transportation anyway.
Not if Yahoo has anything to say about it...
One of the stories that pops up at yahoo mail for the last week is “The Dark Side of Your Low Gas Prices” It is an absolutely insane, bullshit piece about an explosion of oil carrying rail cars in Canada last year, and how American rail is under-regulated, and WE ARE ALL GOING TO DIE IN FIERY OIL EXPLOSIONS, because we have cheap gas and the Feds are simply not regulating enough.
No mention, by the way, of “Hey, let’s build the pipeline, so there is less oil moving on rail.”
I tell ya, I am absolutely paralyzed with horror at the prospect of dying in an oil fire!!!! I say we ditch cheap gas, and go with safer Saudi Oil!!!!
Then there was the yahoo finance story yesterday about our energy production crippling African economies!!! WE CAN’T HAVE THAT!!!!
never read Yahoo. It is all sensationalism
I say “Nay!”. Don’t listen to me.
Krudlow isn't way off base here. The effect of low oil prices in an economy that runs on energy should be a positive. The problem is that the Fed has destroyed that economy. Instead our economy is built around speculation. Witness the "King dollar" phenomenon that Krudlow thinks is some sort of strength. It is nothing more than repatriation of the dollars that the Fed sent to foreign bungholes like Turkey when the Fed decreed the dollar needed to drop. Now that the Turks are seen for what they are, everybody sells that crap currency and rebuys the dollars.
Contrary to Krudlow the strength of the dollar is always now a sign of the fragility of the world economy. The dollar went up with the US-based tech bubble, but since then has only gone up with short squeezes and carry trade unwinding. Basically the dollar is a short term refuge and the Fed actually wants it that way.
I was talking to a young liberal I work with about the cheap oil and and what it means and his attempt to be civil regarding his felings about evil oil was to say that burning fossil fuels is a “temporary solution to our energy needs”.
My response was simply, “Temporary? Not so far...”
I’m curious, does that young liberal drive a car to work?
Like so many other things about the stock market, it makes no sense for analysts to attribute last week’s sell-off in the Dow, including yesterday’s 315-point drop, to the collapse of oil prices.
Of the 30 Dow stocks, only two — Chevron and Exxon — are oil companies which can be expected to suffer from declining oil prices; however, the other 28 Dow companies should benefit, since they provide goods and services that will be cheaper to produce with cheaper oil. The Dow’s retail companies like Walmart, Home Depot, and McDonald’s should especially prosper.
As for a stronger dollar, we know that keeping a nation’s currency low relative to the U.S.’s dollar, as Japan has been doing for decades, makes that nation’s products cheaper and more attractive in the U.S. Otherwise, Hondas and Toyotas would not be flooding our highways. And now that the euro has declined more than 10% recently against the ever-more-obese King Dollar, lower-priced BMWs and Audis will soon be joining the influx of Japanese imports.
Wouldn’t it be nice if all we had to do was listen to experts like Larry Kudlow, follow their advice, and make millions in the stock market? But they’ve been wrong so often that their advice is merely interesting, not anything to take seriously.
name says it all yahoo
Larry is usually pretty good. he is a supply sider. but he supports amnesty.
I’m curious, does that young liberal drive a car to work?
It should make overseas vacations (and vacations in general) much more affordable in 2015.
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