Re: When do we fall off the undulating plateau?
Posted: Fri 27 Oct 2017, 16:05:26
I think the first reason why we will fall off the undulating plateau is the lack of investments made since the oil price crash of 2014.
Global economy is not really recovering, it is artificially helped by central banks which printed money for almost 10 years while technology companies (Amazon, Uber, Ebay, Air bn be...) basically act like parasites on real economy, creating virtual growth (stock) at the expense of jobs and production of goods.
So as a slow growing demand still exists, the need for oil gradually moves north, a bit like water getting hot for the frog cooked alive in the famous story we all know.
My pronostic is that we will wake up one day witnessing oil is now too expensive to have the time left to shift to renewable energies (which is by the way actually impossible without drastically change our non negociable way of life) or to invest in shale or whatever crappy fossil fuels left on this planet.
What will be more interesting is that as oil will get very expensive soon, central banks which already play a game with a credit rate pretty close to 0% won't have any bullet left in their barrel to shoot at inflation with.
My scenario :
1) oil is getting too expensive (+100$), economy slows down, "experts" don't get why
2) central banks low back their rate because the focus is not yet on oil prices, but on the worry about this slowing economy
3) energy and food inflation kicks in + jobs cut while dow jones getting higher
4) oil is getting more expensive (we fall off the plateau, so even with lower demand, oil offer still collapses)
5) dow jones getting higher faster and faster (bubble tech and real estate) BUT central banks become afraid about energy and food inflation : riots, political problems...
6) central banks lift their rate to calm down oil prices
7) which trigger a new collapse of real estate, this time far worse than 2008. In a terminal hurry, investors shift to oil and gold...
8 ) Oil prices skyrocket.
9) Central banks don't know what to do. Game Over.
We are heading right to hell. We are stucked in this plateau since 2008. 2008 was the first step of the global collapse of civilisation. The second step is described above. Enjoy.
Global economy is not really recovering, it is artificially helped by central banks which printed money for almost 10 years while technology companies (Amazon, Uber, Ebay, Air bn be...) basically act like parasites on real economy, creating virtual growth (stock) at the expense of jobs and production of goods.
So as a slow growing demand still exists, the need for oil gradually moves north, a bit like water getting hot for the frog cooked alive in the famous story we all know.
My pronostic is that we will wake up one day witnessing oil is now too expensive to have the time left to shift to renewable energies (which is by the way actually impossible without drastically change our non negociable way of life) or to invest in shale or whatever crappy fossil fuels left on this planet.
What will be more interesting is that as oil will get very expensive soon, central banks which already play a game with a credit rate pretty close to 0% won't have any bullet left in their barrel to shoot at inflation with.
My scenario :
1) oil is getting too expensive (+100$), economy slows down, "experts" don't get why
2) central banks low back their rate because the focus is not yet on oil prices, but on the worry about this slowing economy
3) energy and food inflation kicks in + jobs cut while dow jones getting higher
4) oil is getting more expensive (we fall off the plateau, so even with lower demand, oil offer still collapses)
5) dow jones getting higher faster and faster (bubble tech and real estate) BUT central banks become afraid about energy and food inflation : riots, political problems...
6) central banks lift their rate to calm down oil prices
7) which trigger a new collapse of real estate, this time far worse than 2008. In a terminal hurry, investors shift to oil and gold...
8 ) Oil prices skyrocket.
9) Central banks don't know what to do. Game Over.
We are heading right to hell. We are stucked in this plateau since 2008. 2008 was the first step of the global collapse of civilisation. The second step is described above. Enjoy.