... and pretty soon you're going to have to take the bus to work ( or go to the pool or beach or whatever ) because I can assure you the price of gasoline will continue to escalate beyond all belief.
When you trade in the current 'fuel efficient car' (40 mpg) ... for the midget car that gets 50 mpg two years from now in 2015 you're going to start to wonder why you bought the 'fuel efficient car' in the first place ...
because you should have bought a diesel bus that can transport a lot of people ... and you could get into the 'bussing business' transporting people all over town when the city/county/state no longer provides mass transit services ...
because the city/county/state is broke ... ( unlike you ).
Oh ya ... the market is dependent upon the Fed. What the Fed sayeth, the stocky-wocky market doeth. The Fed holds the hand of the market at all times, the Fed coddles the market whenever the market weepers. And so on, and so on.
Here's something for Mr Cio... to think of ...
The Fed is also dependent upon the market. I'll go as far to say, "The only reason why the Fed exists is so the (not so) 'free market' can tell the US Gov't what to do."
COT Data Suggests Oil's Fall Is Coming [View article]
The Middle East is full of turmoil. With Kaddafi gone, Libya is under 'western influence,' and the USA/EU would like to control Syria as well. Syria might turn into a full scale Shiite-Sunni war. If that happens, Iraq might fall into Iranian hands ... and 'western oil pumpers' would be very upset. There's no telling how much money the Texas-Oklahoma oil industry lost when the Shah of Iran was overthrown in 1979. As is, with world resources of cheap crude oil constantly on the decline ... the EU/USA would like to take back the oil fields in Iran.
Simply put, it's cheaper to use the military to take over the Middle East that can produce a 'new' drum of crude for about $30-50 ... as compared to $80-100 for a drum of 'fracked' crude oil in Texas and North Dakota.
If full scale war breaks out in the Middle East ... oil could easily rise to $300 a drum ... until rationing goes into effect ... just like the 1970s. That's why oil might be about to break out of a trading range and why the USA has stockpiled crude to the max.
Oil pops over $125 a drum ... war in the Middle East is likely. Oil sinks to under $80 a drum ... global recession is the call.
Who Ended Up With Jobs In The New Normal? [View article]
Employers are 'very age' sensitive as to who they hire:
Mr H. wrote "Employment in the next age group down (45 to 54) is still contracting long after the end of the Great Recession;"
My response ... easy to understand as this group is 'worn out' and usually has a number of minor-major medical problems which prohibit working in a 'boiler room' that many employment situations have become.
Mr H wrote, "Employment levels in age group 35 to 44 have not recovered from the effects of the recession - and the situation remains static for over 3 years;"
My response .... This age group is the 'most educated' of the 'age' work groups ... and knows enough about business to run their own ... but middle management jobs in existing companies are hard to come by ... and most middle management that are involved in hiring/firing people will employ someone younger.
Mr H wrote, "The age groups from 20 to 34 have almost fully recovered to pre-recession levels and are on a growth trend line;"
My response ... this age group was 'put back to work' in full force because .... they don't 'know enough' to start their own business and are 'forced back to work' because they have little savings to live off. Typically, they have 'less health problems' than older folks ... and they are easy to 'boss around' by 'older people' ... hence they will get hired for an 'entry-mid level' job before someone else who is older. If you look at 'employment numbers' as 'troop levels' in a 'financial war' ... since most soldiers are young private-sergeant grunts ... this is the age group that will be hired first.
And the youngest segment of the population (16 through 19) continues to suffer the worst effects of the recession.
My response .... no one wants to hire a 'kid' ... as most are not responsible and are still trying to figure out how to put on their shoes in the morning ... let alone being capable of showing up to work at a regular time ... day after day ... week after week ... year after year ... no matter what.
Simple fact of life is employment in the USSA is full of stereotypes ... that's what socialism is all about.
What If The Secular Bear Market Is Not Over? [View article]
Mr Harding wrote, "Then we also have the remaining serious situations created by the 2008 financial collapse that still must be tackled at some point down the road, with their impact unknown. They include the record global government debt loads, the reversal of the unprecedented massive stimulus efforts of central banks, including the U.S. Fed, the return of near zero interest rates to more normal levels, and so on."
I'm sure 'Japanese finance folks' believed that when they began ZIRP and QE in full force in the early 2000s ... that Japan would be returning to 'more normal rates' by this decade. So much for that.
Any attempt by the Fed, BoJ, or ECB to raise short term rates above ... say 1% ... will induce a massive wave of debt deleveraging. So there is really nothing the Fed, ECB, or BoJ can do to control inflation induced by rising energy costs.
It's stagflation all the way until some currency unit decides to default on national debt.
Nikkei 225: The Abenomics Rally And Aftermath ... So Far [View article]
I suspect Japan's recent October 2012-May 2013 rally will retrace this summer to the October 2012 levels.
The global economy is on a downtrend ... and the emerging markets (Brazil, China, etc.) are sinking. Where is Japan's export economy going to expand shipment of goods to ??? ... not Brazil. Not France. And certainly not the Middle East.
The USA-Japanese economy is much more linked than people would like to believe ... Japan still holds a decent chunk of US Treasury debt ... and one possible reason for the recent surge in US Tbond rates is a lack of Japanese purchase of foreign gov't bonds. What would cause Japan to go cold turkey on purchasing US debt? A lack of crude oil imports ... or liquid natural gas imports would do the trick.
USA production of crude oil (above 6 mb/d) really began to pick up in the Fall of 2011 ... about the same time as gold/silver prices peaked. As goes US production of crude ... so goes the price of gold/silver ... and the USA-Japanese economy.
It looks like oil might be ready to jump over $100 a barrel ... which has nothing to do with supply/demand in the USA ... and everything to do with Middle East and Syria.
When Japan's economy can no longer import crude oil ... for whatever reason ... that's when Japan cracks ... and Uncle Ben will have to print more money to purchase US TBonds that no private investor wants to purchase at current bond price levels.
The Federal Reserve Has No Idea What It Is Doing [View article]
The Federal Reserve does know what it's doing ... it's taken over the 'fiscal policy' job of Congress ... namely the Fed is now creating money (raising revenue for the gov't by running a printing press) to purchase 'MBS assets which are no longer performing.'
The Fed's balance sheet consists of ballpark $1.2 trillion of JUNK MBS paper that isn't worth 50 cents on the dollar ... and this balance sheet (tumor) continues to inflate by $40 billion per month. The Fed has no intention of 'selling the junk' back to the banks ... which unloaded their 'loser loans' onto the Fed ... until inflation makes the loses on the loans more 'bearable' for the banks. The downside to this ideology ... as the Fed continues to force inflation ... end demand for consumer goods continues to abate and the end consumer continues to default on debt.
In the process of ignoring debt default the Fed/Obama regime has turned the USA into a 'social democracy' ... which used to be a republic with a 'constitution.' And by running the global economy at 'full throttle' and yet doing little to solve the 'PEAK OIL' problem ... the banking industry which the Fed supports ... is indirectly responsible for producing the current political instability in the Middle East.
Yes, the Fed did 'rescue' the US economy in 2009 ... but has made the 'next recession' all the more sickening. As a comparison ... the 1930s depression was followed by a 1940s World War. Essentially the Fed has 'skipped the depression phase' and placed the USA on a war path determined to control Middle East oil. It's easy to see why Bernanke is 'burned out' and exhausted as he's no different from a '4 star general' who has chosen a strategy which leads to a 'dire outcome' in the current global economic war.
Someone once said, "war is but diplomacy by other means" ... ignoring debt default ... and the Fed's refusal to follow Article 1 Section 7 Clause 1 of the US Constitution ... just goes to prove "crony capitalism is but fascism by yet another phrase."
By allowing the banks to 'cook the books' ... Bernanke created this recipe for economic disaster. I really hope he stays stuck in the Fed chief job long enough to eat the end result of what's he produced ... which is currently swirling in a toilet.
I agree ... Qatar is a 'Sunni nation' which is 'pro-western' ... and the EU would do anything to get away from former Soviet natural gas supplies.
Russia has been doing business with Syria for years ... just like the US does business with South Korea and Taiwan. If Syria falls, Russia takes a hit in military-industrial exports ... thus the Putin continual support of the Assad regime.
The conflict appears to be escalating ... and Syria will be more difficult to crack than Libya ... time will tell if Syria is the spark that sets the Middle East on fire.
Atticvs Research says the primary reason gasoline consumption is decreasing in the USA is because new cars get better gas mileage compared to old cars ...
the real reason gasoline consumption is on the decline is because people are driving less than they have in the past.
To give an idea about how long it's going to take to get 'new cars' that get 40 mpg on the road ... assuming USA consumers purchase 15 million new cars every year ... that get 40 mpg or better ... in about 15 YEARS the entire fleet of cars driven by US consumers will get 40 mpg or better ... assuming the vehicle is maintained and the vehicle engine ( and tires) functions like the day it did when it was first purchased.
Actually, existing refiners in the USA have upgraded their capacity to produce more gasoline (blended with ethanol) over the last decade ... hence the upward trend in the chart seen here ... http://1.usa.gov/UUdDS5
Make no doubt, the recent 'oil boom' in North Dakota's Bakken field ... and the Texas Eagle Ford field ... was funded by oil drillers who were backed by a financial industry ... which was backed by a crony USA gov't.
At $5-10 million a pop for one oil well in the Bakken ... drilling these wells ain't cheap ... and in the long run ... THEY ARE NOT PROFITABLE ... as the oil well decline rates from a 'fracked' well are much, much higher than a 'traditional oil' well.
As the oil industry requires more capital to pump oil out of the ground ... Wall Street will suck capital from other locations ... to meet this need ... even if the end consumer decides to just leave the car parked in the garage/driveway.
And that's really what's happening ... end demand for gasoline is way down from 2007 ... and yet the USA oil industry can't produce NEW sources of petrol products for anything less than $90 a drum ... and so the stockpiles of crude just keep piling up.
Ditto for the mining industry ... as steel, iron ore, copper, stockpiles etc. ... these commodities are currently ample to meet present demand ... and yet the cost of production for these basic metals has risen much in the past decade BECAUSE OF THE RISING COSTS OF ENERGY.
Eagle Ford Shale Sets New Oil Output Record In March, With A 78% Increase From A Year Ago [View article]
... and most likely a 'real belly flop' into a pool of sticky goo over the long run.
Shale oil wells have a very steep decline rate as noted here ... http://bit.ly/ZuX9C3.name=
"Like all shale wells, decline curves in the Eagle Ford are in the 75% to 80% range. This is comparable to the Barnett Shale and slightly better than the 85% decline curves often seen in the Haynesville. In an effort to smooth out rates of production over time and increase the ultimate recovery of hydrocarbons, producers are currently experimenting with reducing the choke size for Haynesville Shale wells. While this decreases initial production rates (and consequently is less striking in a press release), tighter chokes have demonstrated effectiveness in flattening out decline curves and increasing the amount of gas recovered on the back end of a well's productive lifetime. This may become especially important for companies worried about maintaining their drilling commitments while waiting for gas prices to increase."
Shale oil wells cost on the order of $5-10 million a piece to drill/frack the well ... which doesn't include the infrastructure required to move shale oil and/or gas to refiners. The cost to produce, ship to refiners, and refine shale oil (and distribute the final petro products ) are on the order of $80-90/drum ... and yet the USA consumer is balking at paying $3.5 at the pump for gasoline. Now you know why the USA is loaded to the rim in crude oil stockpiles ... and yet the price of crude doesn't go down. Simply put ... if crude prices fall below $80 a drum ... producing shale oil is a money loser for the petroleum industry and you can bet your horses if crude oil does decline below $80 a drum ... drilling in the Bakken and Eagle Ford will cease.
It's also the reason why the USA is stuck in the MidEast with a foreign policy which has but one goal ... to obtain Middle East crude oil sources of oil as cheaply as possible. Syria ... just like Libya ... is more than likely sitting on shale oil reserves ... which XOM, BP, Total, etc. would like to get their hand on. Hence the USA/UK/EU need to take over Syria.
Time will tell if Syria falls as easily as Libya ... and assuming Syria does fall into 'western oil pumping friendly' hands this summer ... my guess is Syrian oil production will rise for about 2-5 years before production resumes a steady decline.
Condensate (from 'wet gas' wells ) ... which is very light crude oil rich in pentanes and hexanes ... might already be leveling off in the Eagle Ford ... http://bit.ly/13kGI8u
Goodbye Bernanke, Thanks For Inflating The Biggest Bond Bubble The World Has Ever Seen [View article]
"But he is a chicken that doesn't like the coop he's in. I really hope Ben Bernanke gets fried."
Mining Industry Forecast: 2013-2014 [View article]
http://bit.ly/U8mYRJ
Inflation Remains Extremely Low [View article]
When you trade in the current 'fuel efficient car' (40 mpg) ... for the midget car that gets 50 mpg two years from now in 2015 you're going to start to wonder why you bought the 'fuel efficient car' in the first place ...
because you should have bought a diesel bus that can transport a lot of people ... and you could get into the 'bussing business' transporting people all over town when the city/county/state no longer provides mass transit services ...
because the city/county/state is broke ... ( unlike you ).
Navigating A Fed-Dependent Market [View article]
Here's something for Mr Cio... to think of ...
The Fed is also dependent upon the market. I'll go as far to say, "The only reason why the Fed exists is so the (not so) 'free market' can tell the US Gov't what to do."
COT Data Suggests Oil's Fall Is Coming [View article]
Simply put, it's cheaper to use the military to take over the Middle East that can produce a 'new' drum of crude for about $30-50 ... as compared to $80-100 for a drum of 'fracked' crude oil in Texas and North Dakota.
If full scale war breaks out in the Middle East ... oil could easily rise to $300 a drum ... until rationing goes into effect ... just like the 1970s. That's why oil might be about to break out of a trading range and why the USA has stockpiled crude to the max.
Oil pops over $125 a drum ... war in the Middle East is likely.
Oil sinks to under $80 a drum ... global recession is the call.
Who Ended Up With Jobs In The New Normal? [View article]
Mr H. wrote "Employment in the next age group down (45 to 54) is still contracting long after the end of the Great Recession;"
My response ... easy to understand as this group is 'worn out' and usually has a number of minor-major medical problems which prohibit working in a 'boiler room' that many employment situations have become.
Mr H wrote, "Employment levels in age group 35 to 44 have not recovered from the effects of the recession - and the situation remains static for over 3 years;"
My response .... This age group is the 'most educated' of the 'age' work groups ... and knows enough about business to run their own ... but middle management jobs in existing companies are hard to come by ... and most middle management that are involved in hiring/firing people will employ someone younger.
Mr H wrote, "The age groups from 20 to 34 have almost fully recovered to pre-recession levels and are on a growth trend line;"
My response ... this age group was 'put back to work' in full force because .... they don't 'know enough' to start their own business and are 'forced back to work' because they have little savings to live off. Typically, they have 'less health problems' than older folks ... and they are easy to 'boss around' by 'older people' ... hence they will get hired for an 'entry-mid level' job before someone else who is older. If you look at 'employment numbers' as 'troop levels' in a 'financial war' ... since most soldiers are young private-sergeant grunts ... this is the age group that will be hired first.
And the youngest segment of the population (16 through 19) continues to suffer the worst effects of the recession.
My response .... no one wants to hire a 'kid' ... as most are not responsible and are still trying to figure out how to put on their shoes in the morning ... let alone being capable of showing up to work at a regular time ... day after day ... week after week ... year after year ... no matter what.
Simple fact of life is employment in the USSA is full of stereotypes ... that's what socialism is all about.
What If The Secular Bear Market Is Not Over? [View article]
I'm sure 'Japanese finance folks' believed that when they began ZIRP and QE in full force in the early 2000s ... that Japan would be returning to 'more normal rates' by this decade. So much for that.
Any attempt by the Fed, BoJ, or ECB to raise short term rates above ... say 1% ... will induce a massive wave of debt deleveraging. So there is really nothing the Fed, ECB, or BoJ can do to control inflation induced by rising energy costs.
It's stagflation all the way until some currency unit decides to default on national debt.
Nikkei 225: The Abenomics Rally And Aftermath ... So Far [View article]
The global economy is on a downtrend ... and the emerging markets (Brazil, China, etc.) are sinking. Where is Japan's export economy going to expand shipment of goods to ??? ... not Brazil. Not France. And certainly not the Middle East.
The USA-Japanese economy is much more linked than people would like to believe ... Japan still holds a decent chunk of US Treasury debt ... and one possible reason for the recent surge in US Tbond rates is a lack of Japanese purchase of foreign gov't bonds. What would cause Japan to go cold turkey on purchasing US debt? A lack of crude oil imports ... or liquid natural gas imports would do the trick.
USA production of crude oil (above 6 mb/d) really began to pick up in the Fall of 2011 ... about the same time as gold/silver prices peaked. As goes US production of crude ... so goes the price of gold/silver ... and the USA-Japanese economy.
It looks like oil might be ready to jump over $100 a barrel ... which has nothing to do with supply/demand in the USA ... and everything to do with Middle East and Syria.
When Japan's economy can no longer import crude oil ... for whatever reason ... that's when Japan cracks ... and Uncle Ben will have to print more money to purchase US TBonds that no private investor wants to purchase at current bond price levels.
The Federal Reserve Has No Idea What It Is Doing [View article]
The Fed's balance sheet consists of ballpark $1.2 trillion of JUNK MBS paper that isn't worth 50 cents on the dollar ... and this balance sheet (tumor) continues to inflate by $40 billion per month. The Fed has no intention of 'selling the junk' back to the banks ... which unloaded their 'loser loans' onto the Fed ... until inflation makes the loses on the loans more 'bearable' for the banks. The downside to this ideology ... as the Fed continues to force inflation ... end demand for consumer goods continues to abate and the end consumer continues to default on debt.
In the process of ignoring debt default the Fed/Obama regime has turned the USA into a 'social democracy' ... which used to be a republic with a 'constitution.' And by running the global economy at 'full throttle' and yet doing little to solve the 'PEAK OIL' problem ... the banking industry which the Fed supports ... is indirectly responsible for producing the current political instability in the Middle East.
Yes, the Fed did 'rescue' the US economy in 2009 ... but has made the 'next recession' all the more sickening. As a comparison ... the 1930s depression was followed by a 1940s World War. Essentially the Fed has 'skipped the depression phase' and placed the USA on a war path determined to control Middle East oil. It's easy to see why Bernanke is 'burned out' and exhausted as he's no different from a '4 star general' who has chosen a strategy which leads to a 'dire outcome' in the current global economic war.
Someone once said, "war is but diplomacy by other means" ... ignoring debt default ... and the Fed's refusal to follow Article 1 Section 7 Clause 1 of the US Constitution ... just goes to prove "crony capitalism is but fascism by yet another phrase."
By allowing the banks to 'cook the books' ... Bernanke created this recipe for economic disaster. I really hope he stays stuck in the Fed chief job long enough to eat the end result of what's he produced ... which is currently swirling in a toilet.
Record High Crude Oil Inventories [View article]
Russia has been doing business with Syria for years ... just like the US does business with South Korea and Taiwan. If Syria falls, Russia takes a hit in military-industrial exports ... thus the Putin continual support of the Assad regime.
The conflict appears to be escalating ... and Syria will be more difficult to crack than Libya ... time will tell if Syria is the spark that sets the Middle East on fire.
Record High Crude Oil Inventories [View article]
but according to this gov't data ...
http://read.bi/YxYdU8
the real reason gasoline consumption is on the decline is because people are driving less than they have in the past.
To give an idea about how long it's going to take to get 'new cars' that get 40 mpg on the road ... assuming USA consumers purchase 15 million new cars every year ... that get 40 mpg or better ... in about 15 YEARS the entire fleet of cars driven by US consumers will get 40 mpg or better ... assuming the vehicle is maintained and the vehicle engine ( and tires) functions like the day it did when it was first purchased.
Record High Crude Oil Inventories [View article]
http://1.usa.gov/UUdDS5
Record High Crude Oil Inventories [View article]
Record High Crude Oil Inventories [View article]
Make no doubt, the recent 'oil boom' in North Dakota's Bakken field ... and the Texas Eagle Ford field ... was funded by oil drillers who were backed by a financial industry ... which was backed by a crony USA gov't.
At $5-10 million a pop for one oil well in the Bakken ... drilling these wells ain't cheap ... and in the long run ... THEY ARE NOT PROFITABLE ... as the oil well decline rates from a 'fracked' well are much, much higher than a 'traditional oil' well.
As the oil industry requires more capital to pump oil out of the ground ... Wall Street will suck capital from other locations ... to meet this need ... even if the end consumer decides to just leave the car parked in the garage/driveway.
And that's really what's happening ... end demand for gasoline is way down from 2007 ... and yet the USA oil industry can't produce NEW sources of petrol products for anything less than $90 a drum ... and so the stockpiles of crude just keep piling up.
Ditto for the mining industry ... as steel, iron ore, copper, stockpiles etc. ... these commodities are currently ample to meet present demand ... and yet the cost of production for these basic metals has risen much in the past decade BECAUSE OF THE RISING COSTS OF ENERGY.
Eagle Ford Shale Sets New Oil Output Record In March, With A 78% Increase From A Year Ago [View article]
Shale oil wells have a very steep decline rate as noted here ...
http://bit.ly/ZuX9C3.name=
"Like all shale wells, decline curves in the Eagle
Ford are in the 75% to 80% range. This is
comparable to the Barnett Shale and slightly better
than the 85% decline curves often seen in the
Haynesville. In an effort to smooth out rates of
production over time and increase the ultimate
recovery of hydrocarbons, producers are currently
experimenting with reducing the choke size for
Haynesville Shale wells. While this decreases
initial production rates (and consequently is less
striking in a press release), tighter chokes have
demonstrated effectiveness in flattening out
decline curves and increasing the amount of gas
recovered on the back end of a well's productive
lifetime. This may become especially important for
companies worried about maintaining their drilling
commitments while waiting for gas prices to
increase."
Shale oil wells cost on the order of $5-10 million a piece to drill/frack the well ... which doesn't include the infrastructure required to move shale oil and/or gas to refiners. The cost to produce, ship to refiners, and refine shale oil (and distribute the final petro products ) are on the order of $80-90/drum ... and yet the USA consumer is balking at paying $3.5 at the pump for gasoline. Now you know why the USA is loaded to the rim in crude oil stockpiles ... and yet the price of crude doesn't go down. Simply put ... if crude prices fall below $80 a drum ... producing shale oil is a money loser for the petroleum industry and you can bet your horses if crude oil does decline below $80 a drum ... drilling in the Bakken and Eagle Ford will cease.
It's also the reason why the USA is stuck in the MidEast with a foreign policy which has but one goal ... to obtain Middle East crude oil sources of oil as cheaply as possible. Syria ... just like Libya ... is more than likely sitting on shale oil reserves ... which XOM, BP, Total, etc. would like to get their hand on. Hence the USA/UK/EU need to take over Syria.
Time will tell if Syria falls as easily as Libya ... and assuming Syria does fall into 'western oil pumping friendly' hands this summer ... my guess is Syrian oil production will rise for about 2-5 years before production resumes a steady decline.
Condensate (from 'wet gas' wells ) ... which is very light crude oil rich in pentanes and hexanes ... might already be leveling off in the Eagle Ford ...
http://bit.ly/13kGI8u