As oil prices remain elevated above $106 per barrel, one must wonder why this is happening. Wasn’t the advent of fracking supposed to lead to greater production and lower prices?
Surprisingly, parts of this narrative have unfolded as expected. The Energy Information Administration recently reported that, during the week ending July 5, the U.S. produced 7.4 million barrels per day. This marks an 18.4 percent increase from one year prior, representing the highest level of domestic production in over two decades.
Even though oil prices remain stubbornly high, the surge in domestic production, coupled with improvements in energy efficiency, offers numerous advantages for the nation…
According to The Daily Beast, “The increase in U.S. oil production is leading to a reduction in the amount of foreign oil being imported from OPEC nations because domestic fuel is less necessary.”
“At the same time, the U.S. is cutting back on oil consumption due to more fuel-efficient vehicles, reduced driving, the adoption of natural gas for transportation, and increased investments in renewable energy sources. Total liquid fuel usage in the U.S. dropped by 2.1 percent in 2012, and it is anticipated to rise by less than 1 percent in 2013.” Continue reading
Market Moves Ahead Should be Good for Gold, Bad for the US Dollar
By John Williams, Shadowstats
The current situation is anything but normal: our economy, financial systems, markets, and even politics are in disarray. The lingering effects of the 2008 financial panic continue to reverberate. Many of the issues that arose from that crisis—linked to the risk of nearly systemic collapse and ensuing economic turmoil—were merely pushed into the future, unresolved, by the unprecedented liquidity measures and interventions enacted by the Federal Reserve and federal government. Further panic is possible, and the likelihood of severe dollar debasement and inflation appears unavoidable.
Despite this backdrop, several misconceptions have emerged in recent months regarding the Federal Reserve’s quantitative easing, the severity of U.S. fiscal issues, and the supposed economic recovery.
Contrary to the optimism often espoused by popular financial media, the probability of any significant, near-term reduction in the Federal Reserve’s acquisition of U.S. Treasury securities is extremely low. Continue reading
The Labor Department announced last Friday that employers added 195,000 new positions to their payrolls in June. However, the unemployment rate held steady at 7.6 percent, as newcomers to the workforce offset job gains. Still, markets responded positively to the news.
The DOW climbed 147 points while the S&P 500 increased by a full percent. But does this truly indicate an improving economy?
A closer examination of the data reveals a more nuanced picture. The underemployment rate, which accounts for individuals who have stopped looking for work and those working part-time who desire full-time positions, rose to 14.3 percent from 13.8 percent in May. Furthermore, many of the new jobs reported are not conducive to economic growth.
“Over half of the new jobs were in the retail and leisure and hospitality sectors, which typically offer lower wages,” reported Reuters. Continue reading
The world is experiencing both upward and downward shifts, and we’ve only just entered summer. While many Americans were looking forward to barbecues and block parties for Independence Day, a military coup was taking place in Cairo.
Troops and tanks took to the streets, marking the end of Mohamed Morsi’s presidency as fireworks lit up the night sky.
What does this all mean? Uncertainty abounds. Some speculate that the unrest in Egypt is a primary factor behind the rise of oil prices above $102, a narrative that seems equally plausible and troubling.
With U.S. markets closed for the holiday, we turned our gaze eastward. In Japan, there were signs of stocks rebounding once more. After a steep 20 percent drop from mid-May to mid-June, the Nikkei 225 index had surged back up by 12 percent. What does this indicate?
Has the previous sell-off been exaggerated? Will this new upward trend be sustainable? Continue reading