Posted on 11/27/2014 5:26:23 PM PST by blam
November 27, 2014
By: Raul_I_Meijer
We should be glad the price of oil has fallen the way it has (losing another 6% today as I write this). Not because it makes the gas in our cars a bit cheaper, that’s nothing compared to the other service the price slump provides. That is, it allows us to see how the economy is really doing, without the multilayered veil of propaganda, spin, fixed data and bailouts and handouts for the banking system.
It shows us the huge extent to which consumer spending is falling, how much poorer people have become as stock markets set records. It also shows us how desperate producing nations have become, who have seen a third of their often principal source of revenue fall away in a few months’ time. Nigeria was first in line to devalue its currency, others will follow suit.
OPEC today decided not to cut production, but whatever decision they would have come to, nothing would have made one iota of difference. The fact that prices only started falling again after the decision was made public shows you how senseless financial markets have become, dumbed down by easy money for which no working neurons are required.
OPEC has become a theater piece, and the real world out there is getting colder. Oil producing nations can’t afford to cut their output in some vague attempt, with very uncertain outcome, to raise prices. The only way to make up for their losses is to increase production when and where they can. And some can’t even do that.
(snip)
(Excerpt) Read more at marketoracle.co.uk ...
Russia's Most Powerful Oil Official Says Oil Could Fall Below $60 In The Next Few Months
Despite Higher GDP, U.S. Economic Data Continues to Disappoint
https://www.youtube.com/watch?v=9tth-vFM0lA
The only reason the stock market is soaring is because the Fed keeps pumping worthless dollars in to the economy.
Those dollars having nowhere else to go are driving up the price (not value) of stock.
I think the U.S has the most influence with the Sauds. I was thinking earlier last month that this was part of a campaign to starve Putin while at the same time Putin is dumping as much oil as they can.
Then again, what is the ISIS (Eurasia) factor in this? They were dumping oil on the black market too. Is the result of trying to starve them? Because surely the amount they were dumping was insignificant really. Unless they have it piped to Turkey who I have a suspicion cultured ISIS.
Or again, is this some type of result from the concerted effort of our ‘competitors’ trying to de-monopolize the Petro-dollar?
Or again, is fracking so lucrative that the U.S — which has recently become the biggest exporter of oil — driving prices down?
I think it’s anything but a sign of a bad economy. I think it’s a good thing and that it will help jump start the economy. I’m still worried that it would be a false start, but a start it would be. I don’t think QE and low oil prices go together. The stock market scares me cause I don’t know if it’s going to skyrocket on recovery or crash when realistic projections are brought into line.
The world is going to change quite quickly over the next two years as our ‘competitors’ try and wring the last drop from Obama’s America.
Brent - 72 and change.
RBOB- 1.91 !!!!
Or the Arabs (especially the Saudis) are pushing down oil prices to break the oil fracking boom in the US. Lower the price so that fracking isn't practical and many of the drillers will go belly up aiding OPEC in the long term.
Another article by someone who is wrong.
http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Chart.asp
Here are oil prices from 1946 to present adjusted for inflation.
There is no “crash” in real dollar terms.
First of the mont times youd youse (Sto ownas that is) to count on real hustle and bustle with govt muny spenders stimbulating the economy riding and spendin aimlessly nation wide you’re covered Kevin style....And...
Now the people people are out there and loving it all month it WOULD appear. Got’s ta be bolstering those gas prices with nonproductive demand?
“It shows us the huge extent to which consumer spending is falling...”
This guy likes to make stuff up.
Latest figures on consumer spending (Oct) show an increase of .2%.
That’s not strong at all, but it’s an increase, not a drop to the huge extent he claims. That’s why this guy didn’t give any figures, they don’t fit his narrative.
The economy is not doing great, but this guy has no idea why.
I drive a lot at work. The lower gas prices are giving me more expendable dollars, so that is good for the economy. I’m glad to see gas prices getting back down to what they should be. The government does not get as much in tax dollars, but that’s just tough....
break evens for the OPEC cartel:
http://graphics.wsj.com/opec-break-even-prices/
Consumer spending is up, and the only people who think that the economy is doing poorly in the U.S. are the long-term unemployed.
We’re probably headed for 3.9% GDP growth in the 4th Q.
Your data does not reflect the fact that oil extraction is much more efficient today.
Don’t forget, a big chunk of that cheap, easy money is being used by companies to purchase stock back, which gives the appearance of better earnings
I agree.
“We should be glad the price of oil has fallen the way it has (losing another 6% today as I write this). Not because it makes the gas in our cars a bit cheaper, that’s nothing compared to the other service the price slump provides. That is, it allows us to see how the economy is really doing, without the multilayered veil of propaganda, spin, fixed data and bailouts and handouts for the banking system. “
The other day I filled up and I was pretty happy, and it had absolutely nothing to do with that and everything to do with the fact that it was under $45 and it hadn’t been below $50 in ages.
Re: “There is no “crash” in real dollar terms.”
Your chart was made 9 months ago, when oil was just shy of $90.
WTI is currently trading at $68.
If you don’t think that’s a “crash” I’ve got some Energy bonds (now junk) I’d like to sell you.
Stocks are the derivative hidden in plain sight.
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