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Old 07-03-2018, 02:48 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,493
No money to fill the gas tank

The CBs pump money into the financial sector. The financial sector front-runs everything that the producer loop needs to buy. Effective wages drop since purchasing power is diminished by price inflation. A barrel of oil is sold (estimates vary) about 27 times before it is consumed. Since oil is one of the biggest markets, it attracts a lot of speculators. The end result is that; our diminishing purchasing power can't afford to buy oil. Price i8nflation has outrun wage inflation. Add to this; China, et al have put a roof on wages.
Global aggregate purchasing power is falling as various States raise their basic standard of living. Oil is getting more scarce and, more expensive. Our wages are falling and we can't actually pay for oil. The FED pumped out $trillions and some of this went to the junk-bond market to finance fracking.

Sr. Price writes about the fall of oil. It is not so much the price of recovering oil. It is also the amount of energy expended to recover it.
"Net Energy Available for GDP Growth, per barrel of oil, was about 61% of the total original energy in each barrel, after subtracting unavoidable Waste Energy, and Energy Costs of Production; by 2015, that figure had fallen to only 8%. In 2030, the Net Energy provided by the Petroleum Industry is forecasted to be - 0%!"
This is an excellent article.
"According to the thermodynamic thesis, the price of oil has not been able to rise to make good the financial promises of the Oil Industry, simply because the productivity of the world has been insufficient to allow payment of higher prices."
Yep, the money is stuck in the upper loop.

Here is a very comprehensive report on the 12 major debt sectors. Once again, debt is crashing because our wages are insufficient to service it.

China is in rapid meltdown because it too doesn't have high enough wages to service it's debts.
As the FED raises rates it marches straight towards the dreaded inversion of the yield curve.
So, the FED is raising rates to attract fleeing capital. Raising dates will crash domestic markets. The FED has lit one end of our life raft on fire.

7/03 Investor margin debt reaches record high – SRSRocco Report
Yep, smart money is fleeing equities. The dumb money is buying up all the deals with even-higher leverage.
7/03 Companies buying back their own shares is the only thing supporting stocks – CNBC
What could go wrong and, when will it?
7/03 Obrador’s win in Mexico is an opportunity for Trump to end drug war –Tom Luongo
Crucify the bankers if you wants to end the drug war.
Kim Jong Un seems to have stripped a couple of cogs.
North Korea's Kim Jong Un Wants to 'Completely Eliminate Manual Labor'
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