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OPEC agrees to produce slightly more oil as recession fears loom

OPEC agrees to produce slightly more oil as recession fears loom

London (CNN Business)The world’s oil-exporting countries have agreed to a tiny increase in output next month amid fears that a global recession will crimp demand.

The Organization of the Oil Exporting Countries and its allies — which includes Russia — also known as OPEC+, said on Wednesday that it would produce an additional 100,000 barrels a day in September.
This was the first OPEC meeting since US President Joe Biden visited Saudi Arabia last month. Biden urged the country — which is the group’s biggest oil producer — to start pumping more.
For months, prices have climbed as Western embargoes on Russian oil have limited global supply. Those prices have helped the world’s biggest oil companies reap record profits, even as millions face surging fuel bills.
A gallon of regular gasoline in the United States surpassed $5 for the first time in June, though prices have fallen back significantly since then.
The price of Brent crude, the global benchmark, also hit a high of $139 a barrel in March in the days after Russia invaded Ukraine, but Brent is now trading at around $100 as traders fear a global recession will hurt demand.
Brent crude and West Texas Intermediate crude — the North American benchmark — both rose initially on Wednesday after OPEC’s announcement, as oil investors expected a bigger increase in production. But prices fell about 2% by midday.
“As a production rise it is a very small percentage of overall production, and much smaller than previous months increases, and thus makes little difference to the overall supply picture,” Hazel Seftor, senior research analyst for global oil supply at Wood Mackenzie, told CNN Business.

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‘We live in an Orwellian hell-scape’: Facebook fact-checks top economist for stating America IS in a recession after Biden refused to admit it

‘We live in an Orwellian hell-scape’: Facebook fact-checks top economist for stating America IS in a recession after Biden refused to admit it

  • Phillip Magness, the research and education director at the American Institute for Economic Research, believes the U.S. is in a recession
  • Economists usually say it is a recession when two successive quarters have seen negative growth: data on Thursday showed the definition had been met
  • The White House is instead relying on an ‘official declaration’ from the the National Bureau of Economic Research (NBER), which can be very slow
  • Magness’s post on Facebook about the U.S. being in a recession was fact-checked by Facebook and a warning posted online
  • ‘We live in an Orwellian hell-scape,’ he tweeted. ‘Facebook is now ‘fact checking’ anyone who questions the White House’s word-games’ 

Facebook placed a ‘fact-checking’ label on a post written by a top economist stating that the United States is now in a recession – a move he termed ‘Orwellian’.

Two consecutive quarters of negative growth is the standard definition of a recession, and Phillip Magness, the research and education director at the American Institute for Economic Research, posted on Facebook a commentary about the country now being in a recession.

The post – which is no longer visible – was marked by Facebook’s fact checkers as being misleading.

‘We live in an Orwellian hell-scape,’ he tweeted.

‘Facebook is now ‘fact checking’ anyone who questions the White House’s word-games about the definition of a recession.’

Biden on Thursday (pictured) insisted that the country was not in a recession, despite new data showing a second consecutive quarter with negative growth

Biden on Thursday (pictured) insisted that the country was not in a recession, despite new data showing a second consecutive quarter with negative growth

Phillip Magness, an economic historian, believes the U.S. is in recession - but the White House disagrees

Phillip Magness, an economic historian, believes the U.S. is in recession – but the White House disagrees

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

‘The economy is going to collapse,’ says Wall Street veteran Novogratz. ‘We are going to go into a really fast recession.’

‘The economy is going to collapse,’ says Wall Street veteran Novogratz. ‘We are going to go into a really fast recession.’

Veteran investor and bitcoin bull Michael Novogratz’s economic outlook is not rosy

Michael Novogratz, founder and chief executive officer of Galaxy Digital Capital Management LP, spoke with MarketWatch on Wednesday ahead of a historically aggressive Fed rate hike.

Veteran investor and bitcoin bull Michael Novogratz doesn’t have a rosy outlook on the economy, which he described as headed for a substantial downturn, with the likelihood of a “fast recession” on the horizon.

“The economy is going to collapse,” Novogratz told MarketWatch. “We are going to go into a really fast recession, and you can see that in lots of ways,” he said, in a Wednesday interview before the Federal Reserve decided to undertake its biggest interest-rate hike in nearly three decades.

“Housing is starting to roll over,” he said. “Inventories have exploded.”

“There are layoffs in multiple industries, and the Fed is stuck,” he said, with a position of having to “hike [interest rates] until inflation rolls over.”

Central-bank policy makers agreed to deliver an unusual 0.75-percentage-point rate increase, concluding a closely watched two-day policy meeting with a move that would push the Fed’s benchmark federal-funds rate rising to a range between 1.5% and 1.75% as it steps up the effort to quell an inflation rate that is hovering around a 40-year high.

It was the largest increase in the central bank’s policy rate since November 1994.

Before the Fed announced its decision, Novogratz speculated — accurately, it turned out — that the central bank would lift interest rates by 75 basis points and that the market would rally on that news. He also predicted that stocks will sell off in the coming days.

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

Walking backward into the storm

Walking backward into the storm

Are we in a recession?  It is an interesting question because nobody can know for sure.  A recession is defined as two successive quarters of negative growth.  Okay, but how do we know if, in the quarter we are in, the economy is shrinking?  Again, we cannot know this.  This is because the latest data we have is for February 2022… and it showed an unexpected fall in growth to just 0.1 percent.  In the event that growth turned sufficiently negative in March 2022, then the first quarter of 2022 as a whole might have been negative.  And in the event that this negative trend continued through April and on through May and June 2022, then we would indeed be in a recession… but we will only know for sure when the data is published in August.

It is on this kind of uncertainty that economic policy is set.  On top of the slowdown in growth – which may have improved or worsened, but nobody knows yet – comes data for March showing a dramatic fall in retail spending, largely resulting from rising food and fuel prices.  Is this because households and businesses can no longer afford to buy, or are they reining in their spending in anticipation of higher prices in future?  Again, we do not know.  Certainly, food and energy retailers have warned that prices will have to rise in future.  At the same time, households and businesses face higher local and national taxes and utility bills.  And so, falling sales is likely a combination of both prices that have already risen and the expectation of price rises to come.

Crucially though, the lens through which economic policy makers are viewing the economic clouds gathering on the horizon is a financial lens which looks back fondly on the sunlit uplands of the pre-2008 years as some kind of normal…

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

The Inflation Blame Game

The Inflation Blame Game

Now inflation is Russia’s fault. Or is it greedy businesses pushing up prices? Maybe a combination of the two.

It seems that government officials and central bankers are looking everywhere for a place to pin the blame for inflation except the one place they need to look — in the mirror.

I’m already seeing headlines about how Russia’s invasion of Ukraine is causing inflation. CBS broadcast this storyline on the first day of the invasion. As Peter Schiff put it in a recent podcast, Russia is the latest “excuse variant” for inflation.

It is true that the Russian invasion and economic sanctions have caused some prices to spike. Oil was over $130 a barrel over the weekend. Copper hit record highs. The price of wheat surged. But this is not necessarily inflationary. Inflation causes a general rise in prices across the board. In this situation, some prices will rise while others fall. As consumers spend more on food and energy, they will cut spending on other goods and services. Ostensibly, those prices will drop.

Inflation — an increase in the money supply — causes prices to rise more generally. It’s the result of more dollars chasing the same number of (or fewer) goods and services. As Peter explained, the culprit is the central bank.

What makes the prices go up is when the central bank responds to rising energy prices or rising food prices by printing more money, which is what they are going to do. Because as consumers have to tighten their belts because food is so expensive, because home heating oil and gasoline are so expensive, and they cut back spending on everything else, that causes a recession. And that results in the Fed printing more money, and that’s what’s inflationary.”

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

Will There Be a 2024 Presidential Election?

WILL THERE BE A 2024 PRESIDENTIAL ELECTION?

“All tyrannies rule through fraud and force, but once the fraud is exposed, they must rely exclusively on force.” ― George Orwell

Vanessa E. Thompson on Twitter: "Just a reminder..." / TwitterEvil Assad, Evil Gaddafi, Now Evil Putin: How the West Sells War (and Makes a Killing) | Groupe Gaulliste Sceaux

“Every war when it comes, or before it comes, is represented not as a war but as an act of self-defense against a homicidal maniac.” ― George Orwell

The smell of tyranny is in the air. The level of propaganda, disinformation, and mistruth has reached astounding heights, as the ruling oligarchy/Deep State/globalist cabal are thrashing about violently because their frauds are being exposed on a daily basis. This shift to the tyranny of force has massive implications for everyone on the planet. When every quote from Orwell’s 1984 applies every day to everything swirling around us, you begin to realize we are in the midst of a dystopian nightmare which gets more ghoulish by the day.

The last two years have been a fraud of epic proportions, conducted by a cadre of evil money titans, their financial, media, and medical apparatchiks, with the objective of tearing down our existing social and economic structure and “resetting” the world where they own everything and you own nothing, eat bugs, and provide the slave labor needed to keep society functioning. Of course, this will be after they dispose of tens of millions of useless eaters through their Covid/Vaxx scheme, global war, and mass starvation.

The past two weeks have denoted a remarkable transformation in the pushing of the fraudulent fearmongering narrative about a relatively non-lethal flu, vaccine mandates, masking and shaming those with the common sense to rely on their immune systems, to trying to provoke a world war over a border dispute with absolutely no relevance or strategic value to our country, other than to further enrich the military industrial complex and the parasites and leeches in government, finance, media and war making industry who live for and love war.

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

2022: Energy limits are likely to push the world economy into recessionIn my view, there are three ways a growing economy can be sustained:

2022: Energy limits are likely to push the world economy into recessionIn my view, there are three ways a growing economy can be sustained:

  1. With a growing supply of cheap-to-produce energy products, matched to the economy’s energy needs.
  2. With growing debt and other indirect promises of future goods and services, such as rising asset prices.
  3. With growing complexity, such as greater mechanization of processes and supply lines that extend around the world.

All three of these approaches are reaching limits. The empty shelves some of us have been seeing recently are testimony to the fact that complexity is reaching a limit. And the growth in debt looks increasingly like a bubble that can easily be popped, perhaps by rising interest rates.

In my view, the first item listed is critical at this time: Is the supply of cheap-to-produce energy products growing fast enough to keep the world economy operating and the debt bubble inflated? My analysis suggests that it is not. There are two parts to this problem:

[a] The cost of producing fossil fuels and delivering them to where they are needed is rising rapidly because of the effects of depletion. This higher cost cannot be passed on to customers, without causing recession. Politicians will act to keep prices low for the benefit of consumers. Ultimately, these low prices will lead to falling production because of inadequate reinvestment to offset depletion.

[b] Non-fossil fuel energy products are not living up to the expectations of their developers. They are not available when they are needed, where they are needed, at a low enough cost for customers. Electricity prices don’t rise high enough to cover their true cost of production. Subsidies for wind and solar tend to drive nuclear electricity out of business, leaving an electricity situation that is worse, rather than better. Rolling blackouts can be expected to become an increasing problem.

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

The hidden recession of 2020

The hidden recession of 2020

After 20 months of economy-wrecking lockdowns and restrictions, 2019 is fondly remembered as a period of prosperous calm.  Memories though, are deceptive.  And in the days before we learned what gain-of-function meant, things were not as rosy as they now seem.  Although the decade 2009-2019 was officially one of the longest periods of economic growth ever recorded, the rate of growth was anaemic – the media reporting on any quarter with more than 1.0% growth as if it heralded a return to the 1960s.  And what growth there was owed more to additional debt than to improvements in productivity.  The reality of the post-2008 years was of the mergence of an 80:20 economy in which the majority watched their prosperity evaporate, while a shrinking metropolitan salaried class fought a rear-guard defence of their income and status.

The political dam broke in 2016, with “the revenge of the places that didn’t matter” – aka Brexit and the election of Donald Trump.  But few in the salaried class understood the economic decline which had spilled over into the political arena; preferring instead to blame it all on Russian bots.  Nevertheless, whether the elites and their salaried lapdogs chose to understand the economic situation or not, the process of decline continued.

In the UK, Christmas 2018 had been the worse on record… until Christmas 2019 rolled around.  And whereas Christmas 2018 had seen a big decline in discretionary spending, Christmas 2019 produced the first indicators of a decline in borderline essential spending too.  We might choose to regard the humble Christmas pudding as something which can be lived without – although those who lived under Cromwell’s puritanical dictatorship might beg to differ – but a decline in sales – along with those of turkey and seasonal biscuits – points to a nation which was reining in its spending long before SARS-CoV-2 embarked upon the European leg of its world tour.

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

 

The next recession: Here’s when the ‘everything bubble’ will burst

The next recession: Here’s when the ‘everything bubble’ will burst

In October 20XX. That’s not a typo. To reach the best guesstimate of when the next recession will begin, we need to understand how the Federal Reserve creates unsustainable booms and why the next bust may be just around the corner.

A caveat is in order. As physicist Niels Bohr exclaimed, “Prediction is very difficult, especially if it’s about the future.” Nevertheless, I will weigh in fearlessly with my 10 cents. The Fed’s inflationary policies have increased my two cents fivefold. Maybe the next cryptocurrency is on the horizon: My 10 Cents.

If a dog can have a crypto, why can’t a retired finance professor who warned the public that prices were about to accelerate due to the Fed’s inflationary policies in the spring of 1976 have one?

Consumer prices rose 5.7% in 1976, 6.5% in 1977, 7.6% in 1978, 11.3% in 1979 and 13.5% in 1980. Talk about being right on the money!

As inflation was galloping throughout his presidency, then President Jimmy Carter appointed Paul Volcker, a former banker and U.S. Treasury official, in 1979 to halt the multiyear price spiral. Volcker succeeded spectacularly. Consumer prices rose 10.3% in 1981, revealing how inflation momentum can continue for a while before the Fed’s tight money policies slay the inflation dragon. In 1982, prices rose 6.1%, 3.2% in 1983, and (miracle of miracles) only 1.9% in 1986, a year before Volcker stepped down as Fed chairman and was replaced by Alan Greenspan.

To accomplish what was considered at the time improbable due to high inflation expectations, the Volcker-led Fed raised the Fed Funds Rate–the rate banks borrow from each other for overnight loans–to 22% by December 1980. The cost of Volcker’s tight monetary policies necessary to halt the dollar’s slide was back-to-back recessions: a short downturn 1980 and then another one, 1981-1982. A case can be made that one long recession occurred that in effect lasted three years, from January 1980 to November 1982.

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

A red light on the dashboard

A red light on the dashboard

On New Year’s Eve 2006-7, something unexpected happened.  For most of the previous two decades, most of the pubs where I live had operated a system where they gave tickets to regular drinkers in order to limit the number of people seeking entry.  This was a problem because one couldn’t secure tickets for guests.  And since my relatives only stayed over for the holidays, it left us to seek out the few pubs that did not operate a ticket policy.  And in most years, these pubs would be packed to the rafters.

When we set out in the last couple of hours of 2006, we fully expected the same crowds as the year before.  So did the pubs, apparently, because they had hired security to control entry – something that was common for British nightclubs but rare for pubs.  What none of us had anticipated though, was that the pubs would be almost empty!  Nor was it just one or two pubs.  Everywhere we went it was the same story.  Indeed, on one occasion the security staff hired to keep the masses out tried hard to encourage us to come in.  Quite simply, tens of thousands of people who had previously gone to pubs to celebrate New Year, stayed at home in 2006.

To me it was a warning sign that something unpleasant and dramatic was about to happen to the economy.  It wasn’t that the beer had risen in price – although supermarket beer had long been cheaper than pub beer.  It was an indicator of something much more profound.  Coming on the heels of rising fuel prices and the central bank decision to begin jacking up interest rates, it was a signal that people’s standard of living had been impacted to the point that discretionary spending was being seriously curtailed.

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

Energy Demand Destruction Will Lead To Global Recession, Tellurian Chairman Warns

Energy Demand Destruction Will Lead To Global Recession, Tellurian Chairman Warns

One month ago, Goldman said that the one thing that could accelerate the resolution of Europe’s energy crisis was plain, simple “demand destruction” – i.e., a plunge in demand due to prices that were too high until the reduced demand leads to less supply and a lower price. Specifically, Goldman estimated “that the potential capacity for gas-to-oil substitution could be larger should gas rally further, of up to 1.35 mb/d in power and 0.6 mb/d in industry (in Asia and Europe), although such a large demand boost would prove too large for the oil market to absorb, leading to a spike in prices to in turn achieve oil demand destruction, the ultimate solution to widespread energy scarcity.

There is just one problem with this: “demand destruction”, i.e., forcible shutdown of manufacturing facilities has direct cost on output.

And as Charif Souki, Executive Board Chairman at U.S. LNG developer Tellurian, said at the online IEF gas forum, the demand destruction that results from high natural gas prices could lead to global recession.

“We are dealing not with a gas crisis, the gas is simply the leading horse, but we are dealing with an energy crisis”

Echoing what Goldman said a month ago, Souki said that the first manifestation of demand destruction is a switch from one fuel to another.

But if all fuels become too expensive then you ask people to start changing their lifestyles, start driving less, turning off the lights more often, not putting the air conditioning on, not heat your home.”

My great fear is the lack of planning is going to lead us to global recession.” He also added that having adequate gas storage is “critical” as is investment in infrastructure.

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

Japan’s Economy Is Again Struggling

Japan’s Economy Is Again Struggling

Japan. the world’s third-largest economy is highly dependent on exports and the reality it is still struggling even after a great deal of America’s stimulus money leaked into buying imported goods speaks volumes. While it feels a bit like ancient history, Japan’s GDP contracted at an annualized rate of 28.8 percent in Q2 of 2020, the biggest decline on record. Even after bouncing back 21.4 percent quarter-on-quarter in Q3 and 12.7 percent in Q4 Japanese national accounts are still lagging behind mid-2019 levels. For all of 2020, spending by households with at least two people fell 5.3% due to the hit from the pandemic. It was down 6.5% for all households, the worst drop since comparable data became available in 2001.

https://cdn.statcdn.com/Infographic/images/normal/22583.jpeg

All in all, this means the country is still playing catch up, partly because Japan also experienced two additional quarters of negative growth in Q1 of 2020 and Q4 of 2019. Adding to the problem is Japan’s household spending fell for the first time in three months in December, in a sign consumer sentiment was weakening even before the government called a state of emergency to control a new wave of the coronavirus. Lower demand for services such as travel tours also weighed, as the pandemic forced the cancellation of domestic tourism promotions. Last year, spending on accommodations fell 43.7%, while overseas and domestic tour travel expenditure slumped 85.8% and 61.9%, respectively.Not only is Japan again struggling to stay out of recession, but it also faces a wall of debt that can only be addressed by printing more money and debasing its currency. This means they will be paying off their debt with worthless yen where possible and in many cases defaulting on the promises they have made. Japan currently has a debt/GDP ratio of about  240% which is the highest in the industrialized world. With the government financing almost 40 percent of its annual budget through debt it becomes easy to draw comparisons between Greece and Japan.

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

japan, bruce wilds, advancing time blog, exports, recession, currency debasement, debt,

The Coming Financial Crisis of 2021

Economist Steve Keen predicts that even if the covid-19 health crisis subsides next year, a brewing financial crisis on par with the 2008 Great Recession is in the making.

He sees the pandemic as having delivered an “unprecedented shock” to the global economy, and the response from authorities as nothing less than a “catastrophe”.

With tens of millions of households having lost their income this year, personal savings becoming exhausted, government support programs on their way to drying up, and lots more company layoffs/bankruptcies/closures ahead — Steve expects a punishing recession to arrive in full force in 2021.

And on a larger scale, he sees modern neoclassical economics — which ignores the importance of natural resources and the health of our ecosystems — as completely unsuited for the reality in which we live today. He warns that if we don’t adapt a more informed approach to managing the global economy, we will only continue to make the mess we’re in worse:

Keynesian Ideas Can Only Make Things Worse

In the New York Times on September 8, 2020, Paul Krugman suggested that

“The CARES Act, enacted in March, gave the unemployed an extra $600 a week in benefits. This supplement played a crucial role in limiting extreme hardship; poverty may even have gone down”.

For Krugman and many economic commentators, it is the duty of the government to support the economy whenever it falls into an economic slump. Following in the footsteps of John Maynard Keynes, most economists hold that one cannot have complete trust in a market economy, which is seen as inherently unstable.  If left free the market economy could lead to self-destruction. Hence, there is the need for governments and central banks to manage the economy. Successful management in the Keynesian framework is done by influencing overall spending.

It is spending that generates income. Spending by one individual becomes income for another individual according to the Keynesian framework of thinking. Hence the more that is spent the better it is going to be. What drives the economy then is spending. If during a recession, consumers fail to spend then it is the role of the government to step in and boost overall spending in order to grow the economy.

In the Keynesian framework of thinking the output that an economy can generate with a given pool of resources (i.e. labour, tools and machinery, and technology) without causing inflation, is labelled as potential output. Hence the greater the pool of resources, all other things being equal, the more output can be generated.

If for whatever reasons the demand for the produced goods is not strong enough this leads to an economic slump. (Inadequate demand for goods leads to only a partial use of existent labour and capital goods).  In this framework then, it makes a lot of sense to boost government spending in order to strengthen demand and eliminate the economic slump.

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France Again Being Forced To Stimulate Is Bad News

France Again Being Forced To Stimulate Is Bad News

France Holds Title Of World’s Most Visited Nation

On Thursday the French government rolled out a new stimulus plan The fact France is again forced to stimulate its economy should be viewed as bad news. The move reflects the reality that all is not well and things are getting worse. France is facing one of Europe’s worst recessions and its deepest since World War Two. France is looking at posting an 11% drop in GDP 2020. This follows a 13.8% second-quarter contraction that coincided with the covid-19 lock-down. This is seen as an attempt to bolster French President Emmanuel Macron’s re-election prospects. Macron is not loved by many of the French people and the “Yellow Vest” protesters that have marched against his policies are proof of this. If France moves back to the right support for a stronger Euro-zone government body will take a big hit.

The stimulus scheme designed to lift the country out of the recent slump aggravated by covid-19 will cost 100 billion euros or about 120 billion dollars. As with most government stimulus plans, it is aimed at reducing unemployment which French officials concede is slated to top 10% next year. The amount of this particular package is equal to roughly 4.5% of the GDP and brings this year’s total stimulus to around 10% of France’s GDP. The French government is betting that by supporting jobs they will give consumers the confidence to start spending the 100 billion euros they stashed away during the lock-down.

Stash Learn shows France as being the second-largest economy in Europe, and the sixth-largest in the world. As the world’s most visited nation, France’s tourism industry is a major component of the country’s economy. This means that France’s economy being in the muck is a big deal.

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

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