Home » Posts tagged 'demand vs supply'

Tag Archives: demand vs supply

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

5 Ways Economy’s Worse Than You Think

November 14, 2021

5 Ways Economy’s Worse Than You Think

https://youtu.be/fpbORCUTMq4

White House Debates Immediate, ‘Radical’ Action To Lower US Energy Prices

November 12, 2021

White House Debates Immediate, ‘Radical’ Action To Lower US Energy Prices

The Biden administration is actively debating whether to immediately intervene to lower US energy prices, rather than letting markets ride and hope they settle, as the ‘most popular president in history’ grapples with soaring inflation amid trade and foreign policy matters, according to Bloomberg.

A pipeline carries oil at the US strategic petroleum reserve facility known as Big Hill near Beaumont, TX

While White House aides have reportedly been lobbying to release the nation’s Strategic Petroleum reserve – or even halting oil exports, several Energy Department officials have pushed back.

For several weeks, a small group of top Biden aides has discussed measures to bring down the cost of gasoline, according to people familiar with the matter. Consensus has so far been elusive, with some Energy Department officials pushing back against tapping the Strategic Petroleum Reserve while White House aides lobby for a release, or the even more radical step of halting oil exports, the people said.

With gasoline at a seven-year high and the US consumer price index hitting a multi-decade high this week, the Biden administration is stuck between trying to boost fuel production to bring down costs, while showing the world how ‘green’ his administration is while the UN climate conference in Glasgow winds down.

“It’s decision time for the Biden administration,” according to Bob McNally, president of consultant Rapidan Energy Group and a former White House official under President George W. Bush.

Those running the show include White House Chief of Staff ‘President’ Ron Klain, National Security Advisor Jake Sullivan, head of the National Economic Council Brian Deese, Energy Secretary Jennifer Granholm and her deputy, David Turk, and finally, energy expert Amos Hochstein who was hired earlier this year to work at the State Department.

…click on the above link to read the rest of the article…

$65 Oil And $5000 Gold: Traders Expect Volatility In Key Commodities

September 13, 2020

$65 Oil And $5000 Gold: Traders Expect Volatility In Key Commodities

The year of the pandemic put two commodities under the spotlight, but for different reasons. Gold prices hit an all-time high in August, while crude oil slipped into negative for a day in April, when demand crashed and inventories soared.

Both oil and gold have seen much volatility this year. Oil prices started 2020 at over $60 a barrel, dipped to the low teens in April – with front-month WTI Crude futures settling one day at a negative price – and rose to $40 in the summer, staying rangebound since then. The crash in demand pushed oil lower, while increased uncertainty over the economic and oil demand recovery, as well as the fears of a second COVID-19 wave, pushed investors to seek safe havens such as gold, driving the precious metal’s price to an all-time high of $2,075 an ounce last month.

The wild rides in the two commodities could represent buying opportunities, analysts argue, expecting oil and gold to rise in the medium term.

For oil, the uptrend may not come as soon as it could in gold, because of the heightened concern about the stalled demand recovery. Still, investment banks and analysts expect prices to increase from current levels over the next one to two years, especially if an effective vaccine hits the markets in 2021.

For gold, low or negative interest rates, continued economic stimulus, and the perception that gold is a hedge against uncertainty about the economy and the upcoming U.S. presidential election are expected to drive prices higher.

Alissa Corcoran, Director of Research at Kopernik Global Investors, told MarketWatch’s Myra P. Saefong that the short-term volatility in commodities could be an opportunity instead of risk.

…click on the above link to read the rest of the article…

Inflation, deflation and other fallacies

September 12, 2020

Inflation, deflation and other fallacies

There can be little doubt that macroeconomic policies are failing around the world. The fallacies being exposed are so entrenched that there are bound to be twists and turns yet to come.

This article explains the fallacies behind inflation, deflation, economic performance and interest rates. They arise from the modern states’ overriding determination to access the wealth of its electorate instead of being driven by a genuine and considered concern for its welfare. Monetary inflation, which has become runaway, transfers wealth to the state from producers and consumers, and is about to accelerate. Everything about macroeconomics is now with that single economically destructive objective in mind.

Falling prices, the outcome of commercial competition and sound money are more aligned with the interests of ordinary people, but that is so derided by neo-Keynesians that today almost without exception everyone believes in inflationism.

And finally, we conclude that the escape from failing fiat will lead to rising nominal interest rates, with all the consequences which that entails. The inevitable outcome is a flight to commodities, including gold and silver, despite rising interest rates for fiat money.

Demand-siders and supply-siders

In a macroeconomics-driven world, economic fallacies abound. They are periodically trashed when disproved, only to arise again as received wisdom for a new generation of macroeconomists determined to justify their statist beliefs. The most egregious of these is that inflation can only occur as the handmaiden of economic growth, while deflation is similarly linked to a recession spinning out of control into the maelstrom of a slump.

This error is the opposite of the facts.

Conventionally, macroeconomists split into two groups. There are the Keynesians who believe in stimulating demand to ensure there will always be markets for goods and services, which they attempt to achieve through additional spending by governments and by discouraging saving, because it is consumption deferred.

…click on the above link to read the rest of the article…

Inflation or Deflation? Collapse in Demand Trumps Supply Shocks

April 29, 2020

Inflation or Deflation? Collapse in Demand Trumps Supply Shocks

The inflationists are coming out of the woodwork, but they are wrong.

Get Ready for the Return of Inflation, says Tim Congdon, in a Wall Street Journal op-ed.

The economists Milton Friedman and Anna Jacobson Schwartz demonstrated in “A Monetary History of the United States” that a collapse in the quantity of money was the main cause of the Great Depression. Hoping to avoid a repeat, the Federal Reserve in recent weeks has poured money into the economy at the fastest rate in the past 200 years. Unfortunately, this overreaction could turn out just as poorly; history suggests the U.S. will soon see an inflation boom.

Friedman and Schwartz used a broad definition of the quantity of money that included all bank deposits, and found that U.S. money stock shrank by 38% between October 1929 and April 1933. Some prominent economists—including Princeton’s Paul Krugman and Columbia’s Joseph Stiglitz—claim that money growth no longer matters much, but they’re wrong. After all, the 2007-09 recession showed that the ever-changing fortunes of the banking system have a significant effect on demand, output and employment. From 2010-18, growth rates of the quantity of money and nominal gross domestic product were virtually identical at 4% a year.

Policy makers have repeatedly called the battle against the novel coronavirus a war. As in wartime, federal expenditures are rising sharply while tax revenues are being hit by the lockdown. Both World War I and World War II—and, indeed, the Vietnam War—were followed by nasty bouts of inflation. If that happens again, policy makers today being cheered for their swift, decisive action will instead have to answer for their grave lack of foresight.

Inflation View is Wrong

The inflation view espoused above is widely held. Some even call for hyperinflation. 

However, the collapse in demand, dwarfs supply shocks and monetary printing.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress