Professorlocknload
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The greatest fear on the part of the central bank is falling prices. Oil has a significant enough input influence on prices of most everything, that the creator of money “currency” will see to it that the price of it is supported.
How? Well, one way might be, the DoD is the biggest single consumer, and it is a branch of the same entity the Fed hails from. Matter of fact, the Department of Defense even uses the Feds products, ie; Federal Reserve (notes) Credit. Oh, so does the U.S. Treasury. So much for the Fed “independence” meme.
Likely, the DoD curtailed it’s ME interventions a bit too hastily, cutting oil consumption too rapidly. My guess is, re-escalation will be on .gov’s agenda soon. That, and maybe some sort of surprise “terra” operation on production/distribution facilities, to accelerate the process, mind you.
I don’t believe I want to be short oil here, or bet on the possibility the Fed won’t double down on it’s grand monetization drive. (Inflate, or die?”)
Or, to put it another way, if oil hits $20-$30, I’d wager on a money blizzard that could block the sun. Then one might leverage the hell out of “long oil.” Long everything but the buck, for that matter.
Has anyone asked about tapping the trillions of tons of mass moved each day on the planet by the predictable and consistent tides? Twice a day at different times along the length of coasts?
And try handing it over to the private sector. If it’s profitable, someone will build it, provided they aren’t strangled by regulations.
Oh, I forgot,,,a camel is a horse designed by a central planning committee. Guess the answer is to pump water into the deserts so we may grow more corn to make ethanol, then burn it, using the power generated to pump more water,,,,,,,reversing the function of the windmills to use them as fans to keep the desert cool?
WTF, absurdity is in, after all. Why not turbo charge it?
Yup, if you want more of anything, just subsidize it.
Leviathan certainly knows better how to spend precious capital than all the world’s participants in all the world’s markets. Next up, free refrigerators for Eskimo’s.
Oh, and rate rises at this juncture? Sheesh, now THAT would bring new meaning to the phrase “Price Discovery,” ya think?
Had me all fired up,,,’till I read Diogenes post. Pretty much all I was going to say is there.
May I suggest, Ilargi, picking up a copy of Atlas Shrugged and reading it, not just assorted biased reviews of it?
On Darwin, maybe those who don’t believe in his evolution theories just haven’t been part of the process? Such as those who “shot up” Charlie, I mean?
“Fed Bullish on US Recovery”
The only article on your list that is pertinent to the state of affairs here. The Fed is the economy now. It is all denominated in the Fed’s private currency. All will be the way the Fed wants it.
Or, looked at another way, the Fed can simply buy the debt and burn it, in a grand reset, with the announcement of a new currency, as a worst case scenario. Until then, it will continue to redistribute what’s left of assets to it’s friends and liabilities to it’s foes.
Bottom line. The Fed is too big to fail!
ah, yes, the blowback of foreign entanglements. But what ammunition it grants political opportunists.
Big oil is too big to fail. When the price is low enough to add the Global Warming tax without upsetting the chickens, it will begin rising again. Demand is unlimited, supply is not.
Insatiable government must be fed at all costs.
Yes indeed, we should throw out the psychopaths in organized government and replace them with even better organized psychopaths.
Heaven forbid we should see the evils of organized government itself, and whittle it down to manageable size, and keep it there.
A whole lotta folks left a whole lotta money on the table, in believing fiat monetary systems are deflationary in nature.
5% GDP. Is that deflationary? Will it be when it hits 7 to 9% in a few quarters? The level the Fed needs it to be,to fund the U.S. Union and Government Pension Systems?
So, supply and demand (Fundamentals) are back again? With rates at artificial lows? In a world where Central Banks and governments control and manipulate financial systems?
Manipulations which created this bubble in the first place will suddenly yield to fundamental process? Why now? Why, when the Fed is “All in” will it find religion and capitulate, clear it’s desk and go home?
Rest assured, if they feel the need, they will buy Bakken product at top dollar and put it in the SPR, or whatever.
The oil “market” is no more operating on fundamentals than are the equity and security “markets” under this Central Bank Monopoly of “money” creation (discount pricing?)
Supply and demand are secondary factors in this Brave New Economy.
For certain, though, the printing induced “supply shocks” of the 70’s gave the Fed Carte Blanche on continued new money creation, in the aftermath, furthering double digit price inflation in the process. Humm?
WTI up 9% today. Might need to start using this blog as a Contrarian trading indicator.
The Fed just fired a .22 cal across the bow. Mess with ’em and they will pull out a nuke tipped Cruise Missile.
Or fight ’em and go in the ditch.
Bottom line here is, they can simply nationalize oil if they please. They already own the currency in which it is denominated.
Ah, so,,,this is how the Fed raises rates,,,it is ultimately forced to follow Junk spreads up?
Judgment day is getting closer, unless the Fed instructs it’s Pentagon Subsidiary to knock some big holes in some pipelines, or otherwise choke off inputs to the refining industry.
Or, maybe gramma isn’t as helpless as believed, and can still tweak things with massive intervention in the Futures.
Or some of both?
Interesting times, these.
Consumer confidence? Another lying statistic compiled by a politically motivated State institution? And we are to fall for it?
Whatever.
Manipulated interest rates > manipulated dollar value > manipulated markets in anything traded in dollars.
Oil same-same housing, finance and any other State Controlled “Market.”
It all goes in whatever direction they lead it, by a nose ring. None of this ends until the Fed does. When that happens things will get even more gnarly,,,at least for a while.
?? “but the disconnect is evident in the collateral damage caused by the massive devaluation Greece has been forced to undergo” ??
Not to worry, the Fed can guarantee plenty of money to keep the system liquid,,,just not it’s purchasing power.
Fannie Mae is going to be another major contributor to the next QE. And yes, this all goes full on Zimbabwe before real Deflation is allowed to gain a foothold.
Bazooka hasn’t been deployed yet, but it’s dusted off and ready.
Rates must “normalize” to save the system. There is only one way to do that.
Devalue.
Period!
Balance Sheets don’t matter in Centrally Planned Economies. The Planners will set all GDP numbers from now on.
What isn’t understood here is, the Planners own it all now. It will be as they wish.
Think Soviet/fascist hybrid. That’s where it is and has been going all along. Total redistribution and control of the means of production is where it ends, but that’s after several generations.
It’s just how it is. In our lifetimes there will be no going back. Time to choose. Travel with ’em, or drop off the radar and travel independently. Oh, and not a good idea to be in the periphery when the core (The US) calls in all markers. Weapons of War are, after all, GDP components too.
“There won’t be another $50 Trillion.”
Don’t bank on that.
There will be “Whatever it takes” until all resources are under such pressure prices explode. Then the Central Banks will get what they wanted all along. Call it what you will, I’ll call it devaluation of currencies.
Hendry’s fiduciary responsibility is to his clients. That’s just the nature of the business he’s in.
That said, all this dovetails with the grand finale coming up, that is “The Crackup Boom.” He seems to understand that, and is simply making lemonade from lemons.
It serves no purpose to go broke in a Centrally Planned disaster, over which one has no control. To the contrary, one should preserve capital with which to contribute to rebuilding the mess later.
Reminds of the old adage, “I love my country, it’s my government I can’t stand.”
Yeah, jal,
Used to need to buy the two gallon cans to keep oil in those leaky clunkers. Even the new car showrooms had oil catching trays under their wares. Oh, and if the Brit cars ever stopped leaking, it was all over but the crying.
Going extinct,,,since 1800;
Debt Forgiveness? A Jubilee? Well, that has already happened with the Fed’s Wall Street Bailout.
Why not Free Money for the small fry, you ask? Just wait a bit longer. It’s coming.
It’s already starting here; https://www.zerohedge.com/news/2014-11-18/60-households-get-more-benefits-they-pay-taxes
Soon, Central Banks will issue Gift Cards and Credits along with Prepaid Charge Cards, if that’s what it takes to get devaluation going. “Whatever it Takes!”
Ah, the holiday buying season. I wonder, will PM’s be included in drastically discounted Black Friday sales, or mightn’t it be better to wait until the new year for deeper discounted bargains?
At the risk of getting all religious, I’ll just repost this from my comment on the day’s debt rattle articles. Really, the Fed hasn’t begun to fight.
What’s the Fed’s next move?
https://www.acting-man.com/?p=34171
Of course. These three points are their only option from the beginning.
“And Washington just sits by and lets it happen all over again.”
No, not sitting and letting,,,but promoting it all. It is protection guaranteed by Central Power that makes it all possible.
Not to worry though, Kuntsler’s “Dictator” will come riding in on a white horse in 2016 and save us all. Not a matter of whether a Dictator wins, as much as whoever wins will become one.
‘Till then, convert all the free money you can into things real. He who makes it through rampant devaluation with the most debt wins.
Then, we’ll all find out about the glories of Absolute Power.
“Deflationary Collapse?”
I’ll take the “Other” on that. Or maybe a choice between two “Others.”
A “Stagflationary” long, drawn out slow death, or a typical “Hyperinflationary Depression.”
Of course, in the case of the latter, the end result would be, the currency is destroyed, along with all debt based upon it. A default of a different feather, but still a default.
Only reason “D” happened in the Big One was, there was gold, against which the dollar was marked. There were limits to the quantity of “Credits” that could be created. This time around, there are no such boundaries, only the imagination.
TPTB allowing an increase in purchasing power, Deflation, ie; direct default? While the Central Banks are still running things? Fat chance. It would be suicidal.
Still, War will let them off the hook, so that is the ultimate scenario anyway it’s sliced.
“More debt. Which is a good thing, right?”
Now you get it. In a Centrally Planned Economy, he who dies with the most debt wins. Literally.
Only a fool saves fiat currency, to be means tested or inflated out of it eventually.
And at today’s low cost of money, leverage can be substantial when currency devaluation comes on line full force, which is as inevitable as the tides.
Some alternatives to the oil conundrum?
https://www.zeromotorcycles.com
https://cumminsengines.com/dual-fuel
https://www.engadget.com/2014/11/04/mercedes-benz-vision-g-code-concept/
Aside, on the machinations of One World Government, New World Order, “Illuminati” inspired philosophies, let the success of the Euro stand as an example of the outcome of mass cat herding techniques.
Seems we are heading farther afield of that scenario, not deeper into it. The Internet Reformation has thrown some rocks into the cogs of the best made plans.
I cannot recall a time when even the common folks down at the local coffee are questioning the Fed, Pentagon and other authoritarian apparitions, to the extent they now are.
Of course, war as rallying cry is still effective, at least to some extent, but even that is being questioned these days.
Gonna be hard for the power to rein in media to only one newspaper “Hearst” and three audio video alphabet soup media outlets, FDR style, this day and age.
Keynesian insanity. Add in, fear of loss of control and you have the necessary ingredients for the destruction of societies and nations.
Do these bureaucrats really believe folks stop heating their homes, driving to work, buying groceries and purchasing necessities because they believe the piece will fall? Maybe the dumb apparatchiks within leviathan believe, but not the ring leaders. And it is the leaders who have been granted full consent, as usual, so here we are.
Unfortunately, the likes of FDR have been sold as heroes when in fact they are the villian opportunists who were sure to not let a crisis go to waste.
It’s all here, for inquiring minds. https://mises.org/books/agd.pdf
Price supports, burning of crops, and other assorted breakings of windows. Whatever was necessary to keep ’em down and neatly queued up in bread lines.
And to think, we and our offspring now have to live through a repeat government created and controlled disaster. Must be somehow related to that same government run education system. The one that writes and distributes it’s own version of history’s “Talking Points.”
My old copy of Rothbard’s work is well warn, and every time I review it, I learn more about how it got like this and where this is all going.
