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A Little Bit Of Everything
The US consumer is feeling worse about the outlook, and the rate at which employers were forced to pay up for labor in Q4 was slower than economists expected.
That's a favorable conjuncture for markets in the current environment. A near six-point drop on the Conference Board's gauge of expectations pointed to tepid demand going forward, and when considered with a below-consensus read on the Employment Cost Index, you could make a case that Tuesday's data argued for cooler inflation outcomes.
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Shouldn’t big oil be thanking Biden and his Bidenflation for their record profits? I thought he was the guy responsible for the high gas prices?
This whole things emphasizes the point that you can’t rely on a business to conduct themselves ethically given the opportunity to leverage something like the destruction of tens of thousands of innocent civilians to hike up oil and gas prices. And you certainly can’t rely on media outlets to report on the unethical price increases honestly and not leverage that data point to attack their political opponent.
Everyone is a George Santos when it is convenient for them to be. 😉
No, Biden was the guy who fiddled away the strategic petroleum reserve in a hopeless attempt to lower prices. The thing is, production at Exxon is not going to rise materially in the next decade or two, especially with Biden’s restrictions on drilling. Oil isn’t a lake any of us can pump whenever we want. When I graduated from college the Saudis had nearly a trillion barrels of reserves. Now they are down to a bit more than 200 billion (maybe much less), an 80% drop. About the time they took Aramco public they reported a large increase, perhaps to pump the stock. That’s a lot but right now the world uses roughly 100 bil bls a year. World provable and recoverable reserves are generally pegged at 1.5t tril bls (that’s fifteen years worth). Some analysts have said the US has 3 tril bls of shale oil but production total would tend to belie that number. Oilprice.com shows a 150 bil bl decline in 2021 alone, a 10% drop. Prices will be going up steadily for the next 50 years, no matter who’s in charge of what. One of my favorite old folk-type songs was: “There ain’t no more cane on the Brazos, my boy … They done ground it all to molasses….” We done burned all that oil and now it’s soon to be gone.
The Every excerpt is provocative and raises some interesting points.
I think the Biden administration and most democrats would prefer a return to big Fed rate cuts to maintain the status quo. With my background, I can’t fully interpret how Higher rates are a US weapon, but it seems to me that higher rates bring us closer to a credit event which leads to instability which leads to even more people on the side of the burn it all down GOP.
I think the fed funds rate can be used to turn the screws on our competitors – not sure how all the effects of rates interact but I think basically higher interest rates and stronger dollar make other economies and their currencies weaker which has the effect of making the dollar seem dominant. So far the US is outperforming the competition in this environment. Go us.