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DRASTIC NEWS, BALTIC DRY INDEX MAKES 15 YEAR LOW AS OIL PRICE PLUNGES
In a World where money printing in huge amounts is becoming the norm, one would expect to experience hyper inflation in the price of commodities.
The spanner in the works to the above conclusion is that the actions of central governments cannot be predicted. The scenario ceases to be mathematical but instead becomes political. As the Saudi's can produce oil cheaper than Russia or Iran this is their political method to keep their enemies in economic weakness.
As the ex World Chess champion Garry Kasparov rightly said, the Putin goverment needs a high oil price to prosper. In contrast the Saudi's can produce oil for as little as $10 per barrell and still have the huge cash reserves generated by selling oil at much higher prices for the last 50 years or so.
Risks of war seem low between Russia + Iran v Saudi as the Saudi's have the backing of the USA military and it would end up being a Russia v USA war which seems something that the Russians are not financially equipped for at this time.
Pundits of inflation effects were predicting $200 per barrel oil prices when it was around $100 pb, but on Jan 11th 2016 the price of Brent Crude sits unwanted and unloved at $32.44 per barrel.
One can easily consider this to be utter madness when knowing this valuable commodity is getting used up and when its gone it is gone forever.
Fracking in the USA has helped them to become an exporter of energies (including oil) for the first time in many years as they now enjoy an excess of energy.
We see headlines reading things like "The World drowns in oil" in the press all too frequently in the last year as Chinese manufacturing slows more and more, and this is another of oils huge "levers", it can move the price by large amounts.
China's accounting is less transparent than other economies and it is largely unknown by the rest of the World just how bad their situation really is.
For this reason a far better method of figuring out their economy is simply to keep an eye on the prices of metals and energies as they are more real than any set of accounts can be.
The other great indicator of World economic health is the "Baltic dry Index" . This is an index comprised of the prices charged to deliver cargo's by ship across the world. The price is published daily, and the chart below shows we are breaking down to a new low.
The Baltic Dry Index is a superb indicator of economic strength as it has no futures market or manipulation, this means it only moves up and down on a genuine shipping boom or decline. To understand more about this you can read this page here
What does this all mean? Well it clearly indicates how supply-demand can be extremely sensitive to prices.
Some huge trends will likely occur and getting on board a nice trend is a lot easier than figuring out what all the thousands of politicians will do next.
Image below Baltic Dry Index making a 15 year low, a sign of a very unhealthy economy.
Note: This news is drastic enough to be added to the home page.
The spanner in the works to the above conclusion is that the actions of central governments cannot be predicted. The scenario ceases to be mathematical but instead becomes political. As the Saudi's can produce oil cheaper than Russia or Iran this is their political method to keep their enemies in economic weakness.
As the ex World Chess champion Garry Kasparov rightly said, the Putin goverment needs a high oil price to prosper. In contrast the Saudi's can produce oil for as little as $10 per barrell and still have the huge cash reserves generated by selling oil at much higher prices for the last 50 years or so.
Risks of war seem low between Russia + Iran v Saudi as the Saudi's have the backing of the USA military and it would end up being a Russia v USA war which seems something that the Russians are not financially equipped for at this time.
Pundits of inflation effects were predicting $200 per barrel oil prices when it was around $100 pb, but on Jan 11th 2016 the price of Brent Crude sits unwanted and unloved at $32.44 per barrel.
One can easily consider this to be utter madness when knowing this valuable commodity is getting used up and when its gone it is gone forever.
Fracking in the USA has helped them to become an exporter of energies (including oil) for the first time in many years as they now enjoy an excess of energy.
We see headlines reading things like "The World drowns in oil" in the press all too frequently in the last year as Chinese manufacturing slows more and more, and this is another of oils huge "levers", it can move the price by large amounts.
China's accounting is less transparent than other economies and it is largely unknown by the rest of the World just how bad their situation really is.
For this reason a far better method of figuring out their economy is simply to keep an eye on the prices of metals and energies as they are more real than any set of accounts can be.
The other great indicator of World economic health is the "Baltic dry Index" . This is an index comprised of the prices charged to deliver cargo's by ship across the world. The price is published daily, and the chart below shows we are breaking down to a new low.
The Baltic Dry Index is a superb indicator of economic strength as it has no futures market or manipulation, this means it only moves up and down on a genuine shipping boom or decline. To understand more about this you can read this page here
What does this all mean? Well it clearly indicates how supply-demand can be extremely sensitive to prices.
Some huge trends will likely occur and getting on board a nice trend is a lot easier than figuring out what all the thousands of politicians will do next.
Image below Baltic Dry Index making a 15 year low, a sign of a very unhealthy economy.
Note: This news is drastic enough to be added to the home page.
