Who is going to pick up the slack? JR: Nobody, we are in a depression. This is a global depression. It started in 2007 and it is going to continue indefinitely. Depressions are structural, monetary solutions are cyclical: you cannot solve a structural problem with a cyclical remedy - monetary policy will not work. Confirming the collapse of world GDP expectations, Goldman’s GLI (Global Leading Indicator) has plunged into slowdown with momentum starting to slow... “There is so much surplus oil sloshing around right now, some of it is being stored on tankers at sea. Its well known that there is a glut of oil in the United States because of a lack of infrastructure… A surge in production, coupled with tepid demand, has caused prices to decline by about 13 percent since June: West Texas Intermediate (WTI) is trading at a price discount… And those declining prices have led some commodity traders to decide that excess oil is better left at sea. There are now 25 to 50 million barrels of oil in floating storage, equivalent to more than two days’ worth of demand for the entire United States… This phenomenon may seem odd, but it has happened before. In April 2009, more than 70 million barrels of oil were in storage awaiting future delivery. Of course, that was during the depths of the global economic recession, and spot prices at the time were trading for around $50 per barrel. The gap between the spot and futures prices was a wide one because the markets were relatively confident that the world would eventually dig out from the economic malaise. But the return of significant storage for futures delivery suggests that the world is once again experiencing a period of oversupply.” if you want the sources go look on Elliot Eisenbergs page. Someones awake at least.
Posted on: Sun, 28 Sep 2014 18:16:52 +0000
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