The melt up in the markets continues
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THE WESTERN INFO NEWS IS A JOKE ! I know real people in CHINA ! The Chinese economy is in much more OK condetion dan the western news tells you !
The Chinese market is saying that is so also.
I ask my friends and family regularly. They live in Beijing. They have a lot of complaints but most are societal and political, especially about corruption, not much about economy downturn. They don’t feel anything wrong about economy compared with before. So every time I hear about China crashing I feel I am in trilight zone. I put it that Chinese sky always falling in the West. I talked with my friends in the high levels, they always feel that it is difficult since they see more things but internal political struggle and the difficulty in hadling political and economical issues has not result in deteriorating economy, yet. When ask about their personal situation, they always feel it it getting better. Take my sister for example, she kept moving higher and higher in the day care business in private day care centres. Her salary has increased from $20/month equivalent in early 90s to around $3000/month now. They have been having problem to find qualified teachers. Not like there are a lot of people unemployed. Market is also filled with goods and people are shopping. I feel they are much more ready to spend than me even I am among the high salary earners here. I am not sure about where these people get their information. Unlike in NA, Chinese always complain about government but it does not mean its economy is bad. It has been like that for decades.
Most of the attention on the oil story right now is related to the supply side and how that is impacting markets. I actually think this is a demand side story though. The opportunity has arisen to lock in long term contracts at deep discount prices for a wide range of industrial producers. The sharp declines in oil prices create that opportunity. It is a window though that won’t be open for long. Should US multinationals and other energy intensive users elect to take advantage of current lows they will have a major advantage versus competitors during the slowdown that lies ahead. Don’t forget we are already late on our recession cycle for the US and some other Western markets. The business cycle has only been suppressed though. It has not been eliminated and a slowdown will come. Already, there are some who fret that the Fed may actually end up tightening into the “inevitable” slowdown. What I think this is really about is a gift to the largest of enterprises. Not everyone is in a position to take up long term cheap crude contracts though. Those with strong balance sheets and foresight that do though will be in an enviable position later down the road. And that can be the difference between being a winner and a loser if the stakes are raised during a global recession (or worse).
Good read. Smart companies will buy in tranches and average down so this may not be the bottom but definitely some support to look at on the other side of the chart when prices rise again. Things wont always go smoothly for the Saudis while maxing out their oilfields; one bottle neck and bam.
Rick was saying isis selling oil for $30, watched a discussion about oil on cbc the other night, there were predictions of $30 oil.
Maybe he good gas prices are around awhile.
Well, low oil prices kill a lot of birds with the same stone I suppose. It is NOT sustainable indefinitely though. Not even during a slow period of global growth. So we can only imagine what comes next if this is truly a strategy to knacker the enemy and those who are not cooperating. If these prices are buying time in other words then something else is coming once they start to rise again.
If isis really is selling for $30, it might be no more than isis trying to fund itself, if that’s the case, oil could stay low until isis is prevented from selling their oil.
ISIS are selling oil to Turkish motorists and that’s about it. Maybe they have some petrol stations buying from them but, other than Turkey, they ain’t selling it anywhere else.
They drive some tankers ovrr the Turkish border, park on a roadside and sell to passing motorists. Shell, BP and Exxon do not have to worry yet.
Interesting Bob, could they also be selling to Isreal? Isreal is supporting isis in Syria.
Gold down a bit today, comodities down a bit, maybe we are seeing deflation taking hold, of course Belarus is hyperinflating, we could see that in a few more countries yet.
These predictions of inflation and deflation happening at the same time seem pretty astute right now.
Gary how low do you see oil price go and do you expect replay of 2008 where oil price went down to 31$/barrell and year later went back up to 90ish level? It sure seem to me that is what is going on. I also think that they are trying to break russian economy by lowering price of oil. Problem is that this is also killing U.S fracking buisness which has even higher cost then Russia does. Also if they piss Putin off he can announce rubel backing with gold and russia officially state their reserves which would probably start dollar crash and bunch of black swan events. Check out interview with Paul Craig Roberts on this subject. He covers it.
Stew,
I really have no idea at this point. There is clearly a political component to oil so cycles become worthless in that environment.
Same with gold. I think everything is political since 2011 and more and more so. I used to live in a society which everything was political. I thought I was lucky to get out.
ARE THE SHEEPLE SELLING GOLD IN WALL-MART TODAY ? HA HA ?
to $1050 is on card now… too many days left until Jan 2…
It is always on the card but it is unlikely. It has been tried so many times without success. Deeper it went the quicker the rebound
Thanks Lawrence… rumor is very loud ECB will do QE on Jan 22…I cannot see why PM will go up into that rumor/news..
You may be right. Printing money should be bullish for gold regardless who prints it. More money chases for same goods. Unfortunately more governments print the less gold worth even in the currency which is printed. It is really hard to understand. I just hope economic law starts to function again.
Metals and miners very oversold on the weekly charts.
OIL WILL GO 50 $ ! MARKET DOMINATION !