I get a real laugh out of people
saying that oil will go down in price, as it is
ludicrous to even think so, particularly since
supply is dropping, per a CommodityOnline.com
report that "54 of the top 65 oil-producing
countries have declining production rates".
And demand for oil will be going up, as I
gather from Doug Low, writing in The Oil Drum:
Europe, who extrapolates, "In the next 11 years,
we will consume more than we have in our entire
history. So in order to double the size of our
economy, which we will do at 6% growth in 11
years, we will require more resources than we have
required during our entire history, including
electricity." And all of that takes oil. Lots of
it. Lots and lots and lots of it.
And it
is not only oil that is going up in price, but
everything is
going up, as an article in
the Financial Times quotes David Mackay of
Kellogg, the breakfast cereal conglomerate, that
inflation is really making them wince, as,
"There's really nothing that's gone down: wheat,
edible oils, corn, packaging, the price of oil and
diesel - everything is up anywhere between 19% and
30%."
This is due to, as Martin Hutchinson
implies in a recent The Bear's Lair column,
the Federal Reserve and the federal government
(except Ron Paul) being a bunch of morons. As he
writes, "The final report card can now be written
on the fiscal management of the Bush
administration, the primarily Republican
Congresses since 2001 and the Federal Reserve
chairmen of the period. One's only regret in
writing it is that no grade lower than F has been
discovered."
And part of that egregious
mismanagement is that not only are prices rising
in a terrible inflation, thanks to the damnable
Federal Reserve creating so much excess money and
credit, but you soon won't even have a job to pay
the higher prices! Anthony Cherniawski of the
Practical Investor newsletter has taken a look at
the recent employment report, and notes that,
surprisingly, "Omitted from the report was the CES
Birth/Death Model, which normally puts a positive
spin on the employment report. Not this time!
According to this model, all sectors of the
economy suffered losses, with the grand total
378,000 jobs lost in January." Yikes!
And
while we are here, let's look at the actual
employment numbers, which show that the number of
people employed is 146.248 million, while last
year at this time the number of employed was
145.915 million, a gain of a lousy 333,000 jobs in
a year! Ha ha ha! Hell, spooky Homeland Security
and all those noxious airport security people
probably added that many jobs! Ha ha ha! I was
right; government spending is the economy!
And the unemployed are jobless for longer
periods, too, as the average duration of
unemployment went up to 17.5 weeks, up 6% from the
16.5 weeks duration a year ago!
But this
was not about jobs, but about the oil we need to
get to our stupid jobs in our cars, radio blasting
and passing slower cars driven by people who are
only going the speed limit and who somehow think
speed limits at rush hour are "laws" or something.
And as to oil, we read of Gary Dorsch, of
Global Money Trends Newsletter, citing Milton
Friedman and Anna Schwartz, who famously said,
"Inflation is always and everywhere a monetary
phenomenon. As the government increases the rate
at which it prints money, the result is too much
money chasing too few goods and services. Higher
wages don't cause inflation, and the whopping oil
price increases between 1973 and 1980 didn't cause
the stagflation - a stagnant economy with rising
inflation. Rather, the oil price hikes were the
form inflation took."
And if you want to
see the form inflation took from the perspective
of the Japanese, the Agora Financial's 5-Minute
Forecast reports, "Japan is the world's largest
holder of US Treasuries. Of the country's $973
billion in reserves, $580 billion are US bonds.
That investment, versus the value of the yen, is
down about 13% over the past year alone." Ha ha
ha!
The dollar going down in purchasing
power, which is the same as an increase in prices,
has cost them 13% in one year, all thanks to the
despicable Federal Reserve creating all that money
and credit, so that the government could borrow it
and spend it, which went into the hands of
Americans, which ended up in the hands of the
Japanese, thanks to the trade deficit.
And
before you start crying, "Oh, those poor, poor
Japanese! Won't somebody please, please think of
the Japanese children? Boo hoo hoo!", I have some
news for you that might finally shut you up;
inflation in the US is running (extrapolating from
John Williams' shadowstats.com) about 13%, too! So
you lost 13% of your buying power in one year,
too, thanks to inflation! Ha ha ha!
Now
let's hear you whine, "Oh, poor, poor me! Won't
somebody please, please think of the American
children? Boo hoo hoo!"
The answer is
"no". Children need the painful lesson burned into
their brains of what happened when their parents
acted like morons. Sort of like the first time my
stupid kids caught me taking money out of their
piggy banks, even though I told them that I only
bought them the stupid piggy banks in the first
place so that there would be sources of cash
around that I could dig into when I wanted some
money but my wife won't let me have any.
Just like Wall Street telling you lies to
get you to "invest for the long haul"; it's a
guaranteed loser for the majority of investors,
Wall Street takes all they want, and the
government takes a big ol' cut from both sides in
taxes and fees.
I remember I even
explained to them, "I'm Wall Street and the
government. You're peon garbage that I am going to
bleed dry." Sure enough, they never forgot it!
Richard Daughty is general
partner and COO for Smith Consultant Group,
serving the financial and medical communities, and
the editor of The Mogambo Guru economic newsletter
- an avocational exercise to heap disrespect on
those who desperately deserve
it.
Republished with permission from The Daily Reckoning .
Copyright 2008, The Daily
Reckoning.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
