{"id":51227,"date":"2020-02-18T17:14:14","date_gmt":"2020-02-18T22:14:14","guid":{"rendered":"https:\/\/olduvai.ca\/?p=51227"},"modified":"2020-02-18T17:14:20","modified_gmt":"2020-02-18T22:14:20","slug":"the-world-is-awash-in-oil-false-assurances-magical-thinking-and-complacency-as-global-demand-careens-toward-a-cliff","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=51227","title":{"rendered":"The World Is Awash in Oil, False Assurances, Magical Thinking and Complacency as Global Demand Careens Toward a Cliff"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"http:\/\/charleshughsmith.blogspot.com\/2020\/02\/the-world-is-awash-in-oil-false.html\">The World Is Awash in Oil, False Assurances, Magical Thinking and Complacency as Global Demand Careens Toward a Cliff<\/a><\/h3>\n\n\n\n<p><em>This collapse of price will manifest in all sorts of markets that are based on debt-funded purchases of\u00a0desires\u00a0rather than a warily prudent priority on\u00a0needs.<\/em><\/p>\n\n\n\n<p><strong>Since markets are supposed to discover the price of excesses and scarcities, it&#8217;s a mystery why everything that is in oversupply is still grossly overpriced as global demand slides off a cliff:<\/strong>\u00a0oil, semiconductors, Uber rides, AirBNB listings and many other risk-on \/ global growth stories are still priced as if pre-Covid-19 demand was still guaranteed.<\/p>\n\n\n\n<p>Punters are still buying semiconductor stocks based on out-of-touch projections that are the equivalent to counting the number of fairies on the head of a pin, ignoring the fundamental reality that very few people actually\u00a0<em>need<\/em>\u00a0a new mobile phone, vehicle, laptop, refrigerator, etc.<\/p>\n\n\n\n<p><strong>It boils down to confidence and certainty.<\/strong>\u00a0People pursue what they\u00a0<em>desire but don&#8217;t need<\/em>\u00a0when they&#8217;re brimming with confidence in the future, bolstered by an animal-spirits euphoria that their income and wealth will continue rising&#8211;a sense of certainty anchored by a belief that their economic world is essentially without risk.<\/p>\n\n\n\n<p><strong>When confidence dissipates and is replaced by fear and uncertainty,\u00a0<em>desires<\/em>\u00a0lose their luster and\u00a0<em>needs<\/em>\u00a0take precedence.<\/strong>\u00a0When you&#8217;re afraid of getting a deadly virus or losing your livelihood, status symbols and frivolous spending no longer top the agenda.<\/p>\n\n\n\n<p><strong>Yet the entire risk-on \/ global growth story is based entirely on\u00a0<em>desires not needs<\/em>.<\/strong>\u00a0The vast majority of demand isn&#8217;t for a pressing need, it&#8217;s for\u00a0<em>euphoric aspirational consumption<\/em>, spending intended to make the buyer larger than they really are, in their own self-image and in the image they present to the world in the brands they display, the cafes they dine in, etc. etc.<\/p>\n\n\n\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The World Is Awash in Oil, False Assurances, Magical Thinking and Complacency as Global Demand Careens Toward a Cliff This collapse of price will manifest in all sorts of markets that are based on debt-funded purchases of\u00a0desires\u00a0rather than a warily prudent priority on\u00a0needs. Since markets are supposed to discover the price of excesses and scarcities, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[6237,29042,1357,588,2177,4258],"class_list":["post-51227","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-confidence","tag-global-demand","tag-global-growth","tag-oil","tag-price-collapse","tag-risk-on"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=51227"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51227\/revisions"}],"predecessor-version":[{"id":51228,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51227\/revisions\/51228"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=51227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=51227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=51227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}