Total products supplied is going to come in down 4.5% or so.
You can thank Corn Ethanol and "Drill, Baby, Drill". Domestic Oil production is up 350k bpd, and ethanol is absolutely ROCKING, coming in for the past 4 weeks at 731k bpd (649k bpd for all of 2009)! With an average production increase of 150k bpd for the year.
This is a do or die year for Peak Oil, Peak Imports, and Deflation - and I am betting on all 3 for 2010. While Oil imports have peaked, I am not sure that that means Oil won't be heading down in US$ terms.
All eyes on the bond market.
Treasuries are getting their a$$ handed to them, and that has brought 30 year mortgages back over 5% (if you can actually GET a mortgage) and over 7.5% for jumbos (but no one can get a jumbo mortgage so I guess it does not matter). At these levels, housing is being seriously challenged again, and if rates were to head 50 basis points (.5%) higher - stand back! Timber!!!
I have changed my ultimate outcome from: 55% hyper-inflation, 35% deflation, 10% don't worry/be happy, to: 60% deflation, 30% hyper inflation, 10% don't worry be happy.
I won't bore you with predictions for 2010 other than to say "the truth will out".
My sincere wish for a happy, healthy, and prosperous New Year to all!
13 comments:
Why are you so bent on deflation? I can't understand how printing more dollars makes it more valuable? I understand that credit is contracting but most of those individuals who held the paper already got bailed out.
Last time I checked, China's economy and people are real and their demand for commodities such as oil is real. Didn't China pick up our short fall of oil and then some from 2005 to current? As long as oil is profitable for someone to consume, there will continue to be demand for it.
There is a shift occuring towards a global currency and for that to occur our dollar must fall. Here's a long video talking about the NWO http://video.google.com/videoplay?docid=-515319560256183936&ei=G9s4S5W3GpbsqAO4yIjeAg&q=the+money+masters&hl=en#
You may not agree with it completely, but someone took a large amount of their time to tell the story.
So if you don't know if there is going to be hyperinflation, deflation, or the status quo: how do you invest?
pasttense:
That was the point... I am as lost with the data as you.
I am prone to change my mind with more or different data... when I am wrong, I am gone.
Anon:
I am not bent on ANYTHING. The Fed is NOT the U.S. Treasury and vice versa. The Fed is more independent than many give it credit for. We will just have to see...
First anon-8:23 China is crashing the same as we are and it will be as spectacular as will are shaping up to be. There is currently more oil than demand but once this excess is absorbed there are going to be problems. Deflation vs. Inflation - two points: The first is that everyone is missing the major missing ingredient from Wiemar - the Germans were forced at gunpoint to pay the pills after being disarmed. That is not going to happen in the US. Second: When the financial system crashes and everyone has lost "faith" in the currency then you are back to a barter system or an equivalent and ALL precises crumble which is classic deflation. Yes the run up is usually inflation by it dies quickly. This is where we are heading but will declining energy (oil, coal, uranium, ...) food shortages (think cold weather) a destroyed manufacturing base and education system. Millions or immigrants dumped on us to further disrupt any chance of us forming viable communities even our established religions are under attack. This should be interesting to read about in the history books... Oh, wait, we have to live through this.......
Yes, but that's the exciting part! To be able to shake your fist in the air as everything is collapsing around you, and people can't get fuel, and can't afford food, and there is misery and starvation and gnashing of teeth, and you get to put fist in the air toward the wretched millions and say ... "SEE, I TOLD YOU SO!!!" :)
I may be young-fashioned, but there is nothing to be gained by wishing horrible things on people just because they don't want to listen to your bitter old self anymore. But this is indeed your big chance to "get even," and afterwards likely starve with them.
B,
Maybe these things are just observations, and not hopefulls. Maybe these things are more food for thought ,and act accordingly comments. Surely,no one wants to see such things actually come about. I keep saying things will go smoothly until the hoarders start and then it is game on. Hoarders being anyone one for anything. Living in a hurricane prone area hoarding creates serious havoc on our just in time system. Imagine when the world starts.
peace
It's all in how you phrase it. ;) And yes, I believe there are men (and some women) who are so mad at the world (and especially Obama) and whom nobody listens to anymore, that they would sacrifice the world just to get back at everyone, and say .... "See!!" I feel that way myself sometimes.
Well, for the time being, Jeffers still hasn't said where he'd put all the oil imports if they WERE coming in, as there is almost nowhere left to store any oil or natural gas. And deflation is still occurring due the massive $20 TRILLION in credit being destroyed (two of my credit card limits were cut, housing prices are still dropping, and not to mention all the "for rent" signs everywhere.) Everyone is scrambling for cash - I get ads in my mailbox from people wanting to clean my house! It's almost becoming embarrassing.
Anon:
How true... on hoarding here in Hurricane Vulnerable Area #1 - South Florida.
Mish did a little piece on the oil tankers of the world today ...
http://globaleconomicanalysis.blogspot.com/2009/12/26-mile-long-glut-of-idle-oil-tankers.html
Sure looks to me like we were swimming in oil worldwide before, and now the oil pool is gonna get even deeper, with oil prices about to crash.
Dude 26 miles of oil tankers storing oil sure makes it sound like there's an oil glut in the world! Heck, the US has 327 million barrels of oil in storage... Jesus we are flowing in oil. Let's say theres another 500 million barrels in storage outside the US... that's 827 million barrels in storage!! Though the world consumes ~70 million barrels of oil per day... that's 12 days of oil in storage.... the media can sure fool the sheep all day with these numbers!
Actually, world wide storage is at least 2 Billion barrels, but your point about DOS "Days of Supply" is essentially correct - it is all about DOS.
I realize you'll never get any numbers out of Saudi Arabia, etc., but what percentage of oil storage do you suppose is already full? 97%? Including the oil tankers?
Happy New Year Greg and all! This was a great year because it could have been A LOT worse but it wasn't. We collectively dodged a bullet. I know this is not a great year for anyone who has lost a job this year and I am hopeful their luck will change for the best in the new year but for the rest of the world this has not been a disaster predicted by many (including myself). Eye popping numbers on imports into US. That the country is still functioning is a credit to how much fat there was to be cut out. Also it puts paid to any claims that the country is coming out of its "recession". We will know when the country is really on the mend when we see oil prices spiking up again. Although with the numbers of tankers storing oil piling up, I saw and article that there are 26 miles of them in storage, the prices are likely to come down all of a sudden in the New Year. Then its time to back up the truck and buy as much as you can. Of course when the prices finally do spike up that will wind up causing a Depression. I saw some info on poor harvests last fall in soybeans in the Midwest and Australia and Northern China. That could be a bad thing that hits us in the late spring. Did anyone hear anything about that? I did some preliminary research and the claims of bad harvests seem overstated at least for Midwest.
But if its true. All heck might break loose.
But hey, lets focus on the positive. Great year to all and to all best of luck!
Chuck H.
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