This is unsustainable but most do not pay attention to the financial train wreck heading our way. Continue reading →
Long time ago one of my economic mentors taught me, “Watch what the other hand is doing” when viewing politics. Continue reading →
While many media pundits are on tv celebrating the U.S. leap in oil production there is another side not talked about, Middle East countries Saudi Arabia and Qatar own most of the oil refinery business in the United States. Here is more from a 2013 Washington Times article:
Today, the largest oil refinery in the United States, Motiva in Texas, is owned by Saudi Aramco (a state-owned company) and Royal Dutch Shell (a British and Dutch company). The refinery recently completed a major expansion project, originally driven by growing American demand for Saudi oil in 2007.
Since the expansion began, however, U.S. demand for oil has fallen and production of North American oil has risen. Saudi Aramco has, therefore, repositioned Motiva to accept this change in the market. In addition to importing Saudi oil, the Motiva expansion allows Saudi Aramco to refine and export petroleum products to Latin American markets. Most important, though, the expansion enables Saudi Aramco to refine the heavy crude oils now being extracted from Canadian and American oil sands and shale fields.
Saudi Arabia is also being joined by Qatar in not only the U.S. but also in Canada:
Qatar is also positioned to extract significant profits from the American energy industry. According to the U.S. Energy Information Administration, Qatar holds the third-largest natural-gas reserve in the world and has been the world leader in liquefied natural-gas technology and exportation since 1997. Yet Qatar Petroleum International (also a state-owned company) owns a 70 percent stake in the Golden Pass re-gasification terminal in Texas. The terminal was previously intended to import Qatar’s natural gas into the United States, but with the boom in North American natural gas, Qatar is now seeking to repurpose the facility to export liquefied natural gas and profit from North American resources. Qatar Petroleum International’s CEO, Nasser al-Jaidah, recently stated that the company is seeking to invest in North American shale, a highly touted source of America’s potential energy independence, and on April 15, the company acquired a stake in Suncor Energy’s natural-gas holdings in Canada.
As crude oil prices have collapsed over the last few months oil producers have taken notice here in the US. Once oil prices reach a certain point, oil rig operators start shutting down rigs because it cost more to run them then what it’s worth in pumping oil.
Oil tycoon Boone Pickens is a guy you want to follow on predictions in the oil market and he just came out with one reason why oil prices will likely go back up in 2015. Robert Wenzel from Economic Policy Journal pointed to this interview for reference:
Boone Pickens was on CNBC this morning and he noted that some 75 rigs have been laid down, out of a total of around 1,500 rigs operating in the US. He expects that another 500 rigs will be taken out of operation over the next few months.
This is a big swing in oil production and something that needs to be monitored along with the strength of the dollar.
Here is some economic news I’ve picked up over several days pertaining to the stock market and prices on goods around the country.
About 47 percent of stocks in the Nasdaq Composite Index are down at least 20 percent from their peak in the last 12 months while more than 40 percent have fallen that much in the Russell 2000 Index and the Bloomberg IPO Index.
Here is a breakdown of Producer Prices
The Bureau of Labor Statistics reports that for the 12 months through August, producer prices increased 1.8 percent after rising 1.7 percent in July.
Prices for services related to securities brokerage and dealing fell 4.5 percent in August.
Gasoline index fell 1.4 percent.
Prices for utility natural gas, chicken eggs, diesel fuel, electric power, and raw cotton also moved lower.
The index for potatoes surged 28.0 percent.
Prices for pharmaceutical preparations and jet fuel also advanced.
Consumer Price Index showed decreases and increases as well. I highlighted the bigger jump in food prices jumping with inflation.
Over the last 12 months, the all items index increased 1.7 percent. The energy index fell 2.6 percent, with the gasoline index declining 4.1 percent and the indexes for natural gas
and fuel oil also decreasing.
Food index rose 0.2 percent in August after increasing 0.4 percent in July. The food at home index was also up 0.2 percent. The index for meats, poultry, fish, and eggs rose 1.5 percent in August, the largest increase among the groups. The index for beef and veal rose 4.2 percent, its largest increase since November 2003. The index
for dairy and related products rose 0.6 percent, and the cereals and bakery products index advanced 0.2 percent.
Over the last 12 months, the food at home index has risen 2.9 percent, with the index for meats, poultry, fish and eggs up 8.8 percent.
And finally, picked up an explanation on gas prices stabilizing or decreasing here lately.
The fall in the gasoline index can best be understood in terms of the increased oil productivity in the U.S. OPEC production continues to hover between 36mbd and 38mbd. BUT, non-OPEC output rose to a record 54.8mbd during July. Contributing to that record high is US oil field production, which is soaring and reached almost 9.0mbd in early September. The US is now exporting 3.7mbd of crude oil and petroleum products.
Hat Tip many sources
Obtained some pricing from a person involved with livestock being brought in and sold at a stockyard in eastern Indiana.
Last week top grade cattle were getting $1.50/lb when brought in for sale. Just six years ago same person said going price was around .50/lb.
Stocking up on meat this winter would not be a bad idea.
John Maxfield from theThe Motley Fool penned an article in the USA Today that shows an enticing graph of potentially the next big crash in the markets.
Austrians economic disciples have been screaming the last decade about the Federal Reserve’s printing or now digitizing of money to the banks through borrowing. On top of that, the federal government has needed massive amounts of money to fund welfare/social programs that are by law “mandatory”.
Maxfield and Austrians part ways with his explanation in the article. There really is no more denying inflation is happening. Pricing is exploding across many sectors.
Personally, I have followed the Feds printing and done well. But the money supply is drying up and a downturn is very real down the road