Posted on 12/23/2014 6:57:23 AM PST by Las Vegas Dave
“Be prepared; with oil at $55/barrel, we are in for a big stimulation of the economy. We owe a debt of gratitude to the oil industries in N.Dakota, Ok, and Tx. Thank God for private industry.”
And the Saudis, who have left their spigots fully open, to damage their enemies the Iranians. Perhaps the Russians, too.
And the summary is?
Since no other major developed country has credible growth data anywhere near the 5% ball park, how can US economic growth remain a statistical outlier over an extended period of time?
There are at lease a few obvious and plausible answers to the above questions:
— The Fed knows that these numbers misrepresent the true health of the economy — either now or in the near future.
— US households (especially at the median) are not participating meaningfully in the reported growth — which is probably happening almost exclusively on the far side of the “wealth divide.”
— The US is benefiting globally (in an almost predatory fashion) from having the strongest of currencies and the safest of investment havens.
Unfortunately, the latter two answers carry with them destabilizing social consequences that are far worse (internally and externally) than the mere possibility of yet another economic slowdown — currently utterly unforeseen by the BEA.
From our perspective we actually hope that the Fed knows far more than is evident in this latest happy BEA report.
“It’s a miracle!!!”
The markets are still sniffing all that free money the fed is printing.
And the Saudis, who have left their spigots fully open, to damage their enemies the Iranians.”
True enough. Saudis also lowered their price, but we only get about 10% of our needs from them.
“True enough. Saudis also lowered their price, but we only get about 10% of our needs from them.”
It is not about where our supplies come from. It is about the total, worldwide supply.
Saudi Arabia historically had surplus supply. IOW they do not usually produce at full capacity.
Therefore they CAN and sometimes DO increase their production, to add to worldwide supply, which have the result of lower worldwide prices.
In addition, when they raise their production, which reduces the price of crude worldwide, that discourages alternatives such as shale oil, heavy oil, fracking, ext.
This has gone on for 4 decades, with variations. OPEC was formed partly to give the producing nations collectively the ability to control the world oil market, in terms of price and volume.
As a practical matter, Saudi Arabia was and is the nation with the greatest ability to make a big impact. Their neighbors Kuwait and the Emirates probably follow the Saudi lead, giving them still more clout.
Other than the Q1 2014(polar vortex) the BEA has spit out some relatively good numbers since Q3 2013. If the numbers are really that good, I wouldn't think the GOP would have done as they did in the last election.
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