The 1920's were the good times , when the Fed was just created , everyone thought it would keep the economy stable , businesses responded and went overboard as did investors , with blind confidence inspired by rhetoric and wishful thinking . Then when the Fed couldn't stabilize , production waned , durable goods stayed on shop floors , prices started to fall and then finally wage earners used to beef and three veg ended up with bread and dripping .
Fifteen years earlier the 1905 market had peaked on good news from the Admin and confidence was high .
Then came 1914 ( we know what happened then ) the market dropped , off to war they went , the market rallied , but just before all the troops came home the market wobbled again , had a recovery bounce the next few years , then just as the cycle had restarted the whole lot collapsed .
In the 20's prices were strong and the market believed the Fed tales this gave investors confidence ,
Does it sound like a familiar story line yet ? If 1905 was our 80's and 1920's were the 90's , we would have to look for the signals to call in our 30's ( end of 1929 on ) .
Then the controllers sat back and let it roll , and roll it did , all the way down puke lane .
What will happen when all those troops come home ?
What will happen when all the banks start to really turn the screws ?
I'll leave this section with a passage from that wombat Keynes .
" once banks realize that deflation has significantly impaired the value of their collateral ............ they become particularly anxious that the remainder of their assets should be as liquid and as free from risk as it is possible to make them. This reacts in all sorts of silent and unobserved ways on new enterprise. for it means that banks are less willing than they would normally be to finance any project ............. "
On the oil spin , well okay they want to get out past the shelf , oh and Brazil of course
( the only good thing I like about Brazil is it's currency that soared ) , just side stepping shale in this observation . Now these offshore ideas are all great sounding , but ........ the depths they will have to drill down to will border on records and probably surpass many . To do so they will go through many drill heads and other soft metal parts that will all end up melting into a useless pulp and twisted mess . So as they struggle to get down to the oil , a good bet would be to find the suppliers and buy these stocks , they'll be selling plenty of drilling rods and heads to the oilers .
Oilers get into all sorts of problems when drilling , much of which when the drillhead driver or rods twist or get stuck , can simply be redrilled , but that at levels closer to the surface than where they want to drill on the outer continental shelf and the deep holes they'll have to put down off Brazil .
At the depths they are needing to achieve it's going to be expensive work , I don't think they'd even contemplate the projects from a business sense if they didn't think oil was going to stay high . My money says oils going up , the 130 spot was a nice test area , the 140 flirt followed by the 138 flirt are ominous , and the China news lasted one night , boy the weeks are getting quicker nowdays ...........
................. and lots of melted and buckled rod will be coming back as scrap from the rigs . It's going to be a lot of work for little gain and it will take years to achieve . I prefer the alternatives except hydrogen fuelled vehicles , we don't want bombs driving around our world , it would be safer to get around on weather balloons , as long as you don't smoke that is .........