Murray N. Rothbard explains in 3 minutes why it is that when economic downturns happen the government should just get out of the way. Let prices correct, the pain will be short and sharp but then life will go on, typically in a more prosperous manner.
Oil sends a shudder through the world economy. Japan goes for broke (probably literally) with the Japanese citizenry on board. China fears being sucked into a debasement black hole. Europe clings. We watch.
Floating on top of all this (now) cheap oil are derivatives. Many of these financial instruments assume $90-$100 oil or more to work. At $70 a barrel and lower they become much riskier. Charles Hugh Smith thinks that he hears echos of the last derivative collapse.
Failed it did. But perhaps it was for the best.
I have to say that I have seen some sketchy places in this country and beyond, but Baltimore is possibly the worst urban area I’ve ever seen in terms of total despair and decay. Many parts of it are just a war zone. Take the light rail into a football game some time and look out the window. It is post-apocalyptic. Sofas and refrigerators litter the vacant land between the rails and the housing projects. Graffitti covers everything. (And it’s not even the cool artsy graffiti like one sees in places like Harlem, it’s just messy, dirty graffiti. Mental vomit.) The “Charm City” is just a sad place. Its charm, if it was ever there has long left. At least for me.
Congratulations – you won! Oh my you have a lot of campaign debt to pay off though. Hey I know, maybe we at Supermagacorp can help retire some of that debt for you, SENATOR.
Yep, that’s the truth. Thank God for the Internet. You know, maybe it’s not such a good idea to have the FCC screw it up in the name of “net neutrality.”
Houses, at least most houses, really aren’t that good an investment. Don’t get me wrong, I own a house. I’m rooting for a housing recovery. And I know some people are upside down on their houses and are hoping to get back above water sometime this decade. They don’t want to believe that their largest asset really isn’t that great an asset. But alas, in many cases, perhaps most, this is true.
We’ve written about the petrodollar a number of times. I even wrote 2/3 of a novel around the petrodollar a few years ago. It is important and it is not widely understood.
In a nutshell oil is traded in dollars and only dollars. (Almost entirely, countries have tried to set up side deals without the dollar but for the most part the dollar is where it’s at.) That means if country A wants to buy oil from country B country A better have some dollar reserves. Of course we get to “print” dollars which is nice for us.
The dollar is the world reserve currency. But if that were ever to change, especially if somehow it changed quickly, things would get pretty crazy economically pretty fast, think 2008 times 5. The “good” news is we have a bunch of aircraft carriers on call 24/7 to make sure that doesn’t happen. At least the US thinks it’s sure it won’t happen.
Always makes sense to watch the petrodollar but especially in times like these.