Perry Glasser

IT’S BOOM TIMES IN AMERICA

In Business, Economics, Economy, EDUCATION, Finance, Personal Finance, Political Economy, Wall Street on December 23, 2014 at 8:58 pm

Dollar$ is back after an absence: the rarest thing is cyberspace is a blog with nothing to say. But it is time.

Many a financial prognosticator makes a living by predicting gloom and doom. People like a good scare. The problem is, this is no time to be terrified.

Things have never been better. There, I said it.

The oil price war going on between OPEC and the US is about market share. Oh, and be sure to understand it is a price war. Sweaty Wizards will call it a collapse in the market, but OPEC and the US are going toe to toe to own exports to China and Europe.

The beneficiary of this price war are Citizens. We are usually screwed, but we also put gasoline in our SUVs and warm our homes in winter.

It’s boom times in America. That’s no equivocation. It is fact.

Citizen

Citizen

Once again innovative technology befuddled Malthusian nitwits. We are not running out of natural resources before next week. Movies based on this mythology, notably the Mad Max series with Mel Gibson, were based on the popular notion that civilization would collapse for lack of energy resources. It had to be true. Didn’t Tina Turner sing about it?

Thomas Malthus, an early Wizard, in 1798 predicted the world would eventually starve because while population increased geometrically, food supplies could only increase arithmetically.

Ponder that as you sink your teeth onto your next pizza. Get it gluten-free, if you must, and but note no people driving are dune buggies across the desert and warring for women except in the wanker fantasies of adolescent boys.

Frack!

Frack is not a profanity left over from Battlestar Galactica.

Now it happens that fracking to withdraw oil from shale is a process more expensive than simple drilling, so if you were a Saudi Arabian sheikh and terrified that the US was about to once again become an oil exporter, you’d be hoping to squeeze those Allah-be-damned cowboys in North Dakota out of business. You’d drive the price down. You’d drive the price down by producing more oil than the world needs. You’d create a glut of dead dinosaur juice and put it on the open market at prices not seen in a decade.

You’d not-so-incidentally screw over Iraq and Iran, two places where fundamentalist loons pack their asses with C4 and wish they had atomic bombs for atomic bums. It’s not polite to say ill of those loons, but no one expects Saudi Arabia any time soon to invite fundamentalists into the holy cities of Mecca and Medina. Since Iran and Iraq have nothing to offer their populations, they feed them a steady diet of hatred for Israel, far less nourishing than building an economy, but also far easier. The chief exports of the region–other than petroleum–are pistachio nuts.

You accept a little civil unrest to stay in power, so instead of throwing the rascals out, the legions of unemployed fire automatic weapons into the air, lately killing each other in a contest to see who is crazier to keep 21st century mores away from people who have never experienced the Enlightenment, keep their women kept covered, and, because vagina’s are dangerous and mysterious, still ritually mutilate their daughters.

The OPEC strategy is to make fracking too expensive. Pump oil, pump more oil, keep pumping oil. The cost of a barrel of liquid dinosaur has dropped 40% in months!

Meanwhile, the US consumer will pocket about $500 per year not being spent on gasoline. They’ll spend that cash at restaurants, Disneyworld, at the movies, maybe buy that new refrigerator—all those products called consumer discretionaries. We will enjoy this for a while.  Cruise liners should be lowering prices; so should airlines. Buy stock—don’t be a dope. It’s boom times in  America.

Wizards, a timid lot for whom equivocation is a habit, at first believed the drop in oil was the harbinger of evil, the precursor of worldwide deflation. They advised the very rich, the kinds of people who throw billions at hedge funds, to sell. If everything was about to get cheaper, you’d want cash, too. World markets wobbled, but quickly recovered.

Wizards are still advising caution, but anyone attuned to Wizard-Speak will note how often the words, if, may, and perhaps show up in Wizard epistles. “Yes, we at Binkwater Investments are fairly sure that if the markets don’t go down, they may go up. Make your check payable to Binkwater! Subscribe to our newsletter!”

Deflation is indeed evil, but note, too, that Wizards hate the US Weasel in Chief. That sumbitch won’t deregulate! There’s money to be made, dammit, and just because we nearly bankrupted the world economy in 2007, that sumbitch won’t forgive and forget!  Wizards would choke before publically taking note that  the US economy is just grew 5% in a single quarter, faster than any time in the past eleven years, that employment is going up, and that consumers have all just gotten a bonus in the form of cheap oil. The stock market is at record highs.

It’s hard to find bad news for American investors.

True, the US economy is moving in the opposite direction of the rest of the world. China’s growth rate is slowing; Japan’s is still flat-lining, Europe may be in trouble.

In other words, the market for oil is adjusting to world economies that need lower prices while the only place in the world offering significant growth and low risk is the United States.

Call it American Exceptionalism.

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