over9k
So I didn't tell my wife, but I...
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This post:No don't remember. give us a clue
Well it's not about being recession proof so much as it is how much the rate rises pummel inflation vs pummel the economy. Rate rises obviously cannot contract inflation without also contracting growth but how balanced those contractions are depends on the economy. The yanks have the best balance referece rate rises pummeling inflation without the economy going to hell in a handbasket as well. Other countries are overwhelmingly tipped in the other direction. If rate rises have a much higher proportionate effect on inflation vs economic growth for the americans than other countries then this makes the U.S economy far better able to weather said rate rises (pummel inflation) without tipping into recession.
The other thing to keep in mind is the demand vs supply side of the equation. Pumping rates overwhelmingly hits the demand side. But what do you do if your demand side is already going anyway? Or if it's a supply side problem?
Comparing USA vs europe is an easy one to show with this because europe imposed a whole mountain of sanctions (cut off their supply of) russian oil that the yanks just didn't on account of the U.S not really being supplied with russian oil in the first place.
This gives europe a supply side restriction of the equation that must be balanced by restricting the demand side as well. The U.S does not have this problem - the equation is not unbalanced by russian oil sanctions because they were never being supplied with russian oil to begin with.
This is just one of many factors that enable the U.S economy to weather rate rises far better than, say, europe. There's a whole stack of others (demographics and labour supply being a huge one) but I probably don't need to write everyone a novel for them to get the point.
Neither. They're soon going to be stuck between a rock and a very hard place. Immigration is the *only* thing keeping quite a lot of economies growing/going now.
Aus is a very easy example of this - if this country depends so much on china, and china's going to hell in a handbasket, a substitute must be found or a new economic model must be adopted. Those are the only two options.
With you on this too, but what's going to give? Are we going to hit nasty recession(s) and they just let inflation run rampant in response?
There is no easy way out here.
Depends who's in power and which way the political winds are blowing. Fact is that central bank governors are appointed by politicians.
See I think it's the opposite of this bottle - jerome powell seems to be the only one really really pushing the "we're going to pummel inflation no matter what" narrative.
With the exception of NZ, all the others seem extremely hesitant to give their economies the exact painful medicine they need.
Are they perhaps all too aware of what it will mean (reference recession) if they do?
Are you asking me in a literal/economic sense or in a political sense?
Why we can/can't do something economically is a very different question than why we can/can't do it politically.
Didn't look back through the thread. But your thoughts on the situation with the "petrodollar" and Saudi not renewing specifically with the $USAnd the ECB cuts!
Europe's decided to let inflation run hot rather than tip into recession.
Both exactly as predicted.
a standard strategyWell looks like the middle class is an endangered species in Australia.
Sounds like another step toward the inevitable to me.the situation with the "petrodollar" and Saudi not renewing specifically with the $US
more importantly , will the Saudis buy more ( or any ) US debtSounds like another step toward the inevitable to me.
Of itself well it's just a step. But it is another step and by no means the only one.
There's actually a metric, the "gini coefficient", which is an exponential function, that can then be plotted onto a graph to become what's called a "lorenz curve" to demonstrate this.Well looks like the middle class is an endangered species in Australia.
Trying to get out from under their thumb - before it was a carrot & stick arrangement but with the yanks no longer providing the carrot (the security umbrella) there's no point in continuing to cop the stick.Didn't look back through the thread. But your thoughts on the situation with the "petrodollar" and Saudi not renewing specifically with the $US
As I see it, this is the big issue here.The rest of the world used to piggyback off the americans securing their own oil supply but with the yanks no longer needing to do that thanks to shale oil the rest of the world's had to begin preparing to take care of itself for the first time in decades.
The problem is that you/they have an entire region of people that basically just all hate each other. It wouldn't (won't) take much to kick off some wars/squabbling, hence everyone now in the process of building their navies out.As I see it, this is the big issue here.
Broadly speaking I'm seeing an "axis" that involves China as consumer and various others as suppliers. So in other words, China securing its future oil needs and effectively taking that oil off the market, meanwhile the US does the same albeit internally.
That leaves other countries needing to import oil squabbling over whatever supply hasn't been locked up by China or US. So plausibly an abundance of oil in those two countries, shortages, price hikes and so on for the rest at some point.
Or you adopt the policies we had with the US of A in the past with the new Big Guy and are allowed to get his crumbs by falling in its sphereThe problem is that you/they have an entire region of people that basically just all hate each other. It wouldn't (won't) take much to kick off some wars/squabbling, hence everyone now in the process of building their navies out.
In the past, every time someone even thought about upsetting the apple cart the americans would just sail a carrier past and let them know to not even think about it:
View attachment 178626
So if the yanks aren't going to provide the security/stability umbrella for the region then obviously everyone else will either have to start doing it themselves or find an alternative source of oil.
You've basically got three major suppliers: russia, usa, middle-east. The first has europe by the balls and the europeans know it, the second would be reliable but you're absolutely f***ed if they decide to stop selling it to you (just ask japan in ww2) so it's risky, and the third requires a massive amount of naval power projection to ensure the supply of.
The only alternative source is africa and you'd have to essentially go neo-colonial to get that, it would require invading wherever the oil is and then building all the facilities, all the drilling, from scratch, and then a huge military presence to secure it. You could onshore your refinement at home but you've still got to get the stuff out of the ground and get it to your country so even ignoring the morality of the exercise it would still be, shall we say, very difficult to pull off.
Aside from that you start talking offshore oil rigs which can be done but are way way way more expensive/difficult/dangerous than drilling on land. Drilling several miles into the seabed from atop an offshore platform with things below the surface approaching 5,000 atmospheres of pressure is as difficult and dangerous as it sounds.
So it appears that the world is currently going for option 3.
that sounds like a fair summary to me ,As I see it, this is the big issue here.
Broadly speaking I'm seeing an "axis" that involves China as consumer and various others as suppliers. So in other words, China securing its future oil needs and effectively taking that oil off the market, meanwhile the US does the same albeit internally.
That leaves other countries needing to import oil squabbling over whatever supply hasn't been locked up by China or US. So plausibly an abundance of oil in those two countries, shortages, price hikes and so on for the rest at some point.
It has however greatly increased in price.Oil has not turned into the crisis issue that past predictors have advertised for the past 50 years.
It has however greatly increased in price.
Looking back at the long term, it "should" be trading around $30 taking inflation into account and that should be sufficient to bring on a rush of new production.
There's no major crisis I agree, but the notion that oil is becoming gradually scarcer would seem to be true. Price that was profitable in the past is considered unprofitable today - the oil that remains is getting harder and more costly to extract.
Indeed, an engineered shortage orchestrated by the west.that sounds like a fair summary to me ,
one point over-looked is the direction of finance away from fossil fuel exploration and development ( which will hurt non-BRICS nations )
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