Tuesday, January 7, 2014

ain't seen inflation yet


AIN’T SEEN INFLATION YET

For most of the Twentieth century, inflation and oil prices were pretty much matched.  Obviously there were ups and downs.  The Great Depression saw a drop in prices where the Seventies saw a surge.  But evened out over the eight plus decades that the Federal Reserve Bank has been wiping their asses with Greenbacks ( not that the Greenback deserves much more respect, having been Lincoln’s demonic redheaded stepchild ) and having their sock puppets demand its embrace by the citizenry ( the crippled asswhore FDR made gold illegal and it was allowed back in people’s pockets only after we were all 100% in the bankers control ), the relation between oil and inflation has been pretty solid.  The rate of inflation never veered much off what the global supply and hence price of oil dictated.  You could say that the Fed Bank, whatever else its sins and don’t get me started or we’ll be here all day, was one very smart parasite.  Of course you wouldn’t want to kill the hand that fed you if you were a huge slimy fanged worm hiding in warm dark safety in the lower bowels of a host.  Keep the sucker alive.  And the way to do that was to stick with the energy supply that fed all economic and human activity.  The price of oil was constant in inflation adjusted dollars.

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Until the turn of the century, give or take.  You could argue all day about the Tech Wreck being caused by this disconnect, financing being at the heart of the bubble, or you could say that we went to war in Afghanistan as soon as we saw that the oil price was going to kill our currency, but you have to be careful there.  These are long term trends and you can misinterpret short term blips.  It doesn’t really matter.  What matters is, for five or ten years or so now, oil is no longer constant in dollars.  Oil costs a lot more than it did all last century, adjusted for inflation.  And the main culprit is the death of easily and cheaply extracted oil.  Globally, conventional oil peaked in 2005.  No big deal, we went to Canadian tar sands and Venezuelan crap oil and frack oil and natural gas solids and ethanol.  The only problem was, we peaked globally in all THOSE in 2008.   

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You know, I know, and even that big eared doofus Ross Perot knows that our financial system has screwed the pooch.  It is over and done and a zombie-dead man walking.  The only thing we don’t know is when it is going to go terminal tits up.  Paper currency, while needed day to day and while some minimal savings is needed for rainy days, should be parted with as quickly as you get it.  Hyperinflation isn’t your only concern.  The petrodollar death could, next day quick, halt demand for dollars.  Buy what you need for preps now, those items still being propped up by petroleum subsidy such as Russian imported ammunition or two thousand mile transported grain.  Your precious dollars, those you coveted all your life, will soon be crap.  You know it, but want to forget it.  Panic early and beat the rush.

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11 comments:

  1. Jim.

    YOU KNOW SO MUCH!!

    In a couple of years "you going to surpass my wife " in the knowledge department.

    I often wonder "WHATS GONNA HAPPEN TO THIS NATION IF YOU GUYS ARE NOT AROUND".

    We are going to be in trouble..

    Bruno.

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    Replies
    1. I know it looks easy being perfect all the time, but I do feel the pressure/burden often.

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  2. Lord Bison of the Great Basin and King of Coiffure;

    Absolutely correct, in the ratio to cheaply extracted petroleum to prices of consumer goods determines inflation for everyone, from paupers to kings (banker masters). Now that we're seeing the North American Glut begin to peter out we are seeing the onerous effect of rising prices not only on the completely falsified CPI but actual inflation of common consumer products such as processed foods, medicines, textiles, hand/power-tools, electronics and appliances. (never mind the complete off-the-reservation pricing of defensive armaments and their ammunition, that purely political and a sham). The rate of inflation will only get worse as the rate of extraction becomes more and more expensive to complete/refine into transport fuels/consumer products. The question everybody is asking and no-one with the answer (if anyone actually knows) is telling is when will importation actually stop? Whether is political, environmental, social in its cause, the importation will come to a grinding halt, because we screwed ourselves politically, socially and environmentally depending on the "great" idea that was globalization.

    Globalization would have worked back before World War I when the industrial nations of the world were still very hard at work screwing over the indigenous people of the Southern Hemisphere with complete mineral/natural resource extraction, that makes the skittles eaters of today look like mere amateurs at the High School talent contest. But since the imperial powers were still attempting to keep their "Place in the Sun" there could be no actual cooperation in international trade, since that "Place" was the pinnacle to which all industrial nations aspired to be and maintain, despite thousands of indigenous dead, sowing the seeds for asymmetrical warfare raging throughout the globe today.

    Lord Bison its a damned good thing that this is about to come to a grinding halt, because if it didn't then the only moral choice of an industrial power would be to unleash the stockpiles of WMD's upon the newly educated, long-time enraged indigenous to prevent the wholesale slaughter of the population of the industrial nations of the globe.

    I sure wish I could liquidate all of my limited cash right now, too bad the IRS has their collective hands on my neck and are beginning to squeeze real tight. I just hope that they ease up before all they have is a unemployed corpse that ain't worth the cost of disposal.
    Keep keeping it real James! .

    ReplyDelete
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    1. SoyLent Green always makes corpses worth "disposing" of.

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  3. Good post yesterday, Jim.

    Thought provoking.

    You Know Who

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  4. re: Buy what you need for preps now, those items still being propped up by petroleum subsidy such as Russian imported ammunition or two thousand mile transported grain.

    Hey man! You are on a roll!

    You Know Who

    ReplyDelete
    Replies
    1. Thanks, YKW. Aren't you usually yelling at me, though?

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    2. Only when some of your decisions are questionable.
      I don't think you prefer the "yas suh, yas suh"???

      You Know Who

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    3. Oh, true, I hate Yes Men. But it seems you disagree at times just to be contrary, as when my point made perfect sense. But, hey, just carry on. Peace and love, brother.

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  5. Completely agree on the buy it now bit. Don't wait for that $16 Mora knife to become a $75 regret.

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    Replies
    1. exactly. who isn't regreting all the things now that in five years tripled in price or disapeared-don't compound the mistakes already made

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