Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at crude oil demand. (See the Commodities section.)
Economy & Finance:
At Zero Hedge: QE Or Not QE? Here Is The Market’s Answer In One Simple Chart. Here is a an excerpt:
“The upshot to this attempt to mislead the market what it is doing according to Bank of America, is that:
- the Fed is continuing to “ease” even though rate cuts are now on hold, which is supportive of growth, higher interest rates and higher equities, and
- the Fed is loosening financial conditions by increasing the availability of, and lowering the cost of, leverage, which broadly supports asset prices potentially at the cost of increasing systemic financial risk.
And while we have repeatedly argued why we think that, stripped of all its semantic veneer, the Fed’s latest asset purchase program is, in fact, QE, BofA effectively confirmed why we are right.
Which brings up a tangential, if just as important question: Why is the Fed so concerned about not signaling QE, and why are so many Fed fanboys desperate to parrot whatever Powell is saying day after day? Simply said, there are several reasons why the Fed is making a great effort to let the world know that its security purchases are not QE and are not reflective of any change in monetary policy stance.”
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And t Wolf Street: Another Negative-Interest-Rate Central Bank Laments What Negative Interest Rates Have Wrought
Commodities (Crude Oil Demand):
OilPrice News reports: All Eyes On China As Oil Demand Dwindles. Here is a quote:
“Despite oil prices trading in a range that should have stimulated a notable improvement in consumption, the world actually consumed just 1.6 percent more oil between June and August this year than last, data from the Joint Organisations Data Initiative has shown.
Reuters’ John Kemp quotes the data, noting that this lackluster demand growth was the fastest growth rate since the start of the year and followed a consumption decline in the previous three-month period, but added that most of this growth came from China. And if it weren’t for China, the picture would look even worse.
Excluding China, the 18 largest consumers of oil globally would have recorded a combined consumption decline of 0.9 percent in June-August.
The spike in oil consumption in China is easily explained: a 400,000-bpd new refinery came on stream in May this year and another one with the same capacity was put into operation later. This spurred a jump in oil imports that may not reflect consumption trends accurately or simply do not fit with economic growth figures.”
Forex & Cryptos:
Dollar Forecast Lower against Pound in 2020 as Fed Cuts Rates, Restarts Quantitative Easing
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Bitcoin Halving, Explained. Here is a snippet:
“As many know, Bitcoin’s (BTC) supply is finite. Once 21 million coins are generated, the network will stop producing more. That is one of the main reasons Bitcoin is often referred to as “digital gold” — just like with the yellow metal, there is only a limited amount in the world, and someday, all of it will have been extracted.
Right now, there are around 18 million BTC in circulation, which is roughly 85% of the total cap — but it doesn’t mean that the cryptocurrency is about to reach its limit any time soon. The reason is the protocol, which has been coded into the blockchain from the very start: Every 210,000 blocks, it performs the so-called Bitcoin “halving” or “halvening,” and producing new coins becomes more difficult — just like in gold mining where finding new deposits becomes more challenging over time.
More specifically, the protocol cuts the block reward in half. So, every time a Bitcoin halving occurs, miners begin receiving 50% fewer BTC for verifying transactions.”
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Bitcoin Price Still on Track to Hit $6,200, Eerily Accurate Fractal Predicts
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who closely watch specific markets. If you spot any news that would be of interest to SurvivalBlog readers, then please send it in. News from local news outlets that is missed by the news wire services is especially appreciated. And it need not be only about commodities and precious metals. Thanks!
The law of diminishing returns. Guaranteed to make those who invested first the richest.
You can bet your sweet bippy someone will decide that 21 million fictitious COTR will not be enough, and more will be “minted”. 1011100111 is just a number, after all.
Bitcoin will turn out to be not even worth the paper they are printed on. But not until all the thralls have been flogged sufficiently.
Somewhere in Europe there is a terrarium with three big disembodied and glowing brains having yet another good laugh.
Love the obscure Star Trek reference. Well played!
Bitcoin, by design or not, proved out the ‘crypto’ currency concept. That accomplished, the ‘green light’ can be given to a sovereign crypto currency , that could be a globally accepted digital currency. The Chinese goober- mint is already cooking up their own crypto currency, so a competing western world version is imaginable and necessary. There could be not one, but several that replace the dollar as the reserve currency, yet because the majority of derivatives contracts, and most contracts are in dollars, there could be the original dollar, an international dollar that is mostly digital anyway, might be left on the vine to die, and a domestic digital dollar could coexist with other digital currencies. We can only speculate, yet the future does appear to have a digital current in it.
How Bitcoin will fair is questionable. Because it is not a sovereign currency, yet is widely held, representing substantial digital wealth, who knows. If anyone can’t sleep at night, or thinks they are a genius for holding Bitcoin, I might sell some. I’d rather hold essential tangibles, and the real deal rather than a flash in the pan phony baloney when they flip the switch on something new. Buy low, sell high, and get the percentage gains while you can out of the next horse, but next time, only invest what you can loose. And diversify while you can, cause you need safety or you would not be reading this. Or best yet, if you’ve got more dough than you can roll in, buy precious metals and be done. It will be worth the wait, and it’s weight.
I am a penniless old man and not an investment adviser, so good luck. Seriously, the Lord is your best adviser, so check in with Him on this.
This is not related to any of today’s comments.
When you allow comments from obviously deranged people you do a great disservice to your loyal followers.
Beat the “Freedom of Speech” drum if you want but crazy by any other name is still crazy.
We all have our opinions on every issue.I don’t think insanity is contagious.Hopefully.
You know what I speak of.
Actually I have no idea what you speak of. Please elaborate.
I’m referencing some of the comments that are completely off topic. Many are long winded
rants that are odd,peculiar,nonsensical ramblings of what appears to be a troubled mind.
The editors know who and what I speak of.
Debt will undoubtedly be our undoing. What folly. What fools we be.
This morning I listened to Yanasa Ama Ranch. The title of his video is “2020 Financial Crisis. Has it Started? The 500 Million Dollar Question.”
I suggest you listen to it. He has excellent information of where we are economically right now.
Blessings to you all today,
Thank you Lily for the link; quite scary! Fake financial system is going to doom us.
I’ve been watching the repro situation and the FED is now guaranteeing daily repro through the end of the year. 4th turning cycle is worrisome with its impact on fragile financial status. Grand Solar Minimum and farmer no plant 2020 possibility is entirely possible. Need to triple seed, wheat and corn orders now! Need to become more self-reliant.
Love the obscure Star Trek reference. Well played!
Gamesters of Triskelion I believe, or is it Antwerp?
Re: QE or not QE
A thought experiment, although a radical one.
The Fed now owns a significant portion of the national debt. The Fed is a quasi government agency but not. In any event it is a construct of the government. What if the government and the Fed just decide to eliminate all that debt? Write it off?
Perhaps this is crazy and I have no idea what the ramifications of this event would be. But my studies into social security, monetary policy, banking, Wall Street, etc. have revealed that it is all pretty crazy. 1 and 1 don’t make 2 in their world.
I wonder about this because the Fed has been shedding Mortgage Backed Securities and other private debt. Would not forgive that debt. From all I have read this “not QE” is all about government debt.
I also seem to remember Trump talking early on about some manner to reorganize government debt but for the life of me I don’t remember any details or even if my memory is correct.
It is my view and probably most people’s view on this site that default on the debt will eventually happen. My thought experiment is very low probability but not zero probability IMO. I would have thought years ago that negative interest rates were not possible and yet they exist.
While it is technically possible, it would probably be politically suicidal as well as grossly inflationary–effectively destroying confidence in the U.S. Dollar. . All that would need to be done is for the U.S. Treasury to mint a single gold coin, and stamp it “$10 Trillion Dollars.” That would symbolicly expunge the debt, in a sort of modern day Jubilee. The timing of this would probably have to be AFTER the introduction of a “Dollar” cryptocurrency, when paper dollars and the new e-currency already have separate exchange rates.
Possibly but just to play devil’s advocate…
I am not talking about defaulting on government debt held outside the Federal Reserve. In my fictional world, we would still honor that held by external parties whether they be US citizens, foreign governments, banks, etc. If only the Fed is defaulted on, would this actually destroy the US dollar?
And I am not talking about the Fed injecting any more money into the economy than they are already.
A related question. Who really owns the Fed? It was created by bankers but I am not certain they own it. It theoretically is separate from the Federal Government but can issue US currency. It is neither public nor private really.
And to carry the thought further, many advocate abolishing the Fed. If the Fed were abolished where would it’s assets and liabilities go? Somehow I think they would go to the US Treasury which would answer the question who owns the Fed?
So to go full circle, to me it looks like the US government has already printed a lot of money, and is continuing to do so, to buy back it’s own debt through essentially a front company. Would it really matter to anyone else what they did with their own internal accounting when they have already increased the money supply and have already taken trillions in government debt off the market?
And politically, how many voters even know the Fed exists or what it is or fundamentally care about it. Some yes. Many no.
Not really arguing this point as true or false, good or bad. Just trying to follow this thought experiment a little ways.