M_B_S wrote:http://fcnp.com/2015/08/19/the-peak-oil-crisis-a-4-trillion-hole/
If global oil production does reach some kind of a peak this year and is lower in 2016, can it recover to reach new highs in the years following? Anything from inadequate investment stemming from persistently low oil prices to a major conflict in the Middle East could keep production from rebounding to new all-time highs.
We are living in interesting times and just could see peak oil before we realize it.
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fcnp still hits the point.
PEAK OIL
The erratic swings in price of oil has been thoroughly talking about on this site, geo-political-economic factors will contribute as will cost to price ratios. As as been correctly pointed out though oil has seemed cheap these last few years it actually has been historically high. It basically has priced out some players in the market. Expect to see higher oil prices as demand seriously dwarfs supply in the future.
M_B_S
Cog wrote:Deflation is nothing to fear as long as you can hold onto a job.
Showing an unusual degree of discipline, members of the Organization of the Petroleum Exporting Countries have slashed their output by more than three million barrels a day in recent months as they sought to put a floor under oil prices, which have fallen by $100 a barrel since last summer. That is about 75 percent of the production cuts pledged by members of the cartel since September.
onlooker wrote:Cog wrote:Deflation is nothing to fear as long as you can hold onto a job.
What about Stagflation?
GoghGoner wrote:Good pull, just because he was wrong then...
Pops wrote:GoghGoner wrote:Good pull, just because he was wrong then...
Actually I don't think he was wrong, I think the idea that we have recovered from the recession is wrong... we're just paying our credit card bill with a different credit card at the moment.
Cog wrote:onlooker wrote:Cog wrote:Deflation is nothing to fear as long as you can hold onto a job.
What about Stagflation?
Not so good but we don't have that yet.
ennui2 wrote:If you define "recovery" in terms that can't be met,
Cog wrote:At the time the Fed felt they had no choice.
"The US government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost." "Under a paper-money system, a determined government can always generate higher spending and, hence, positive inflation."[1]
AgentR11 wrote:For those that say deflation isn't a problem.
Bob borrows $500 to plant his wheat.
Bob commits another $1000 in expenses from cash.
Bob spends $500 raising the wheat that he intended to sell at $2500
Bob needs $500 profit from his wheat to pay himself, and buy a loaf of bread for his kids.
Deflation comes into play and bob gets $2400. So he only lost about 5% of the price. Doesn't sound so horrible. And the $2400 technically buys the stuff $2500 did, by definition of inflation.
But... the $500 loan did not become $475.
The $1500 is gone from working cash, and must be replaced.
Thus, Bob's income on the wheat dropped from $500 to $400.
This is a very simplified example of course, but I post it this way to point out the amplifying impact of deflation. That small deflation, causes Bob serious losses, he will either have to cut his lifestyle back 10-15%; or he'll have to borrow to sustain it, and everything he borrows further amplifies the impact of deflation; which will eventually radically cut back his lifestyle whether he likes it or not.
And in a society as leveraged as we are, with as much debt public and private as we have; that amplification cycle will run out of control if not constantly and deliberately countered; and it will do it fast.
Inflation is no threat. Heck, hyperinflation isn't much of a threat. Deflation isn't just a threat, its a doomsday machine for the modern economy.
There are no tools the fed will not touch to prevent deflation. None.
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