OilPrice.com | Finance | the Economy

OilPrice.com | Finance | the Economy Economics news and analysis. We cover commodities, metals, currencies and the general health of the economic system. http://oilprice.com/ Fri, 25 May 2012 3:20:24 GMT Oilprice.com (info@oilprice.com) Lunch with Paul Krugman http://oilprice.com/Finance/the-Economy/Lunch-with-Paul-Krugman.html The first thing I noticed when Paul walked in was the few extra pounds and silvery tinge to his hair he acquired since I saw him last. He's clearly spending too much time behind a computer writing those acidic columns for the New York Times. We're all short dated options in the end, I thought.We met at my favourite San Francisco restaurant, Gary Danko's (click here for their site at http://www.garydanko.com/), where one can get a once in a lifetime, bucket list type meal for about $300 for two, but only if you get the cheaper wine. Ideally located…

]]> (Mad Hedge Fund Trader) Thu, 24 May 2012 22:14:25 GMT http://oilprice.com/Finance/the-Economy/Lunch-with-Paul-Krugman.html World Banks have the Power to save the Global Economy, if they want to http://oilprice.com/Finance/the-Economy/World-Banks-have-the-Power-to-save-the-Global-Economy-if-they-want-to.html The global economy appears to be headed over cliff this year. The emerging world is experiencing a significant economic slow down, the Eurozone will probably break apart in the next few months, and the United States faces sharp austerity measures at the end of the year. There are enough bearish developments here to make the original Mayan calendar look prescient after all. So should we despair? Is the global economy fated to collapse in 2012?No, says Willem Buiter and Ebrahim Rahbari of Citigroup. Though the outlook…

]]> beckie@oilprice.com (David Beckworth) Wed, 16 May 2012 23:06:03 GMT http://oilprice.com/Finance/the-Economy/World-Banks-have-the-Power-to-save-the-Global-Economy-if-they-want-to.html Is Constant Economic Growth Possible? http://oilprice.com/Finance/the-Economy/Is-Constant-Economic-Growth-Possible.html If we read the financial pages, economic growth seems to be viewed as the “normal” situation to which economies inevitably return. But is it really?If we look back over the past 50 years, or even over the past 100 years, economic growth has predominated. Over the longer term, we know that people have become more prosperous, and that world population has grown. The natural assumption is that economic growth will continue in the future as it has in the past.Let’s think about this a little further. We live on an earth with…

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]]> tverberg@oilprice.com (Gail Tverberg) Wed, 02 May 2012 22:50:55 GMT http://oilprice.com/Finance/the-Economy/Is-Constant-Economic-Growth-Possible.html The Death of Global Integration http://oilprice.com/Finance/the-Economy/The-Death-of-Global-Integration.html The world's elites don't want to admit it. But the kind of global village that they have insisted on building--a vast free-trade paradise run by an ever more complex and opaque system of logistics and finance--isn't working, not even for many of them. The cost of maintaining this brittle, complex system and keeping the huge imbalances it creates at bay is becoming dizzyingly expensive.The consequences of those imbalances include heavily indebted countries such as Greece being driven into penury by the financial masters of Europe desperate to keep…

]]> cobbi@oilprice.com (Kurt Cobb) Tue, 24 Apr 2012 21:16:55 GMT http://oilprice.com/Finance/the-Economy/The-Death-of-Global-Integration.html Noble Notion vs Reality http://oilprice.com/Finance/the-Economy/Noble-Notion-vs-Reality.html Seventy six years have passed since the first notion on taxing financial transactions first appeared under the pen of John Maynard Keynes in his study on Theory on Employment Interest and Money. But the idea to tax multi-billion financial transactions has remained yet to be implemented.The latest effort to introduce the financial transactions tax came from the very heart of the European Union.The European Commission, the executive arm of the EU, suggested last year in September that Europe should introduce a so-called Tobin Tax, a tax named after…

]]> (Vladimir Harman) Sun, 01 Apr 2012 15:43:50 GMT http://oilprice.com/Finance/the-Economy/Noble-Notion-vs-Reality.html What the Greek Debt Crisis Tells us about Governance and Public Finances http://oilprice.com/Finance/the-Economy/What-the-Greek-Debt-Crisis-Tells-us-about-Governance-and-Public-Finances.html The Greek sovereign debt crisis has captured the attention of the world, both for what it says about the viability of the Euro and the EU integration project, but also for the warning signs it sends to governments around the world about governance and public finances. In the U.S., politicians both on the right and the left are using Greece as an example of how bad management of public finances can lead to economic catastrophe. In particular, for the right, Greece is at the edge of the abyss because of the bloated government bureaucracy, unreasonably…

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]]> diplomat@oilprice.com (Diplomatic Courier) Tue, 06 Mar 2012 23:05:07 GMT http://oilprice.com/Finance/the-Economy/What-the-Greek-Debt-Crisis-Tells-us-about-Governance-and-Public-Finances.html Ecological Economics: The Battle to Preserve the Natural World http://oilprice.com/Finance/the-Economy/Ecological-Economics-The-Battle-to-Preserve-the-Natural-World.html In September of 1982, a group of scholars met in Stockholm intending to reform -- even to revolutionize -- the study of economics. The new ecological economists saw the economy as embedded in, and supported by, natural systems; nature was not simply a factor in, but the foundation of, economic activity. By integrating models from ecology and economics, ecological economists sought to provide scientific arguments for preserving the natural world. The Stockholm meeting came at a critical time. During the 1970s, prominent environmentalists, encouraged…

]]> breakthrough@oilprice.com (Breakthrough Institute) Thu, 09 Feb 2012 22:27:48 GMT http://oilprice.com/Finance/the-Economy/Ecological-Economics-The-Battle-to-Preserve-the-Natural-World.html Is a Reduction in Population Numbers the only Sustainable Solution? http://oilprice.com/Finance/the-Economy/Is-a-Reduction-in-Population-Numbers-the-only-Sustainable-Solution.html In a recent post, I talked about why we may be reaching Limits to Growth of the type foretold in the 1972 book Limits to Growth. I would like to explain some additional reasons now. Figure 1. Base scenario from 1972 Limits to Growth, printed using today's graphics by Charles Hall and John Day in "Revisiting Limits to Growth After Peak Oil" http://www.esf.edu/efb/hall/2009-05Hall0327.pdf In my earlier post, I talked about how rising oil prices are associated with rising food prices, and how these high prices can make it harder for borrowers to repay…

]]> tverberg@oilprice.com (Gail Tverberg) Mon, 30 Jan 2012 23:32:43 GMT http://oilprice.com/Finance/the-Economy/Is-a-Reduction-in-Population-Numbers-the-only-Sustainable-Solution.html Out of Africa - Portugal solicits Angolan investment http://oilprice.com/Finance/the-Economy/Out-Of-Africa-Portugal-Solicits-Angolan-Investment.html The following is an interesting and cautionary tale for investors looking at relatively "stable" Old Europe and Africa, seemingly mired in perennial crisis. Since last year the Portuguese government has been heavily lobbying its former colony Angola to invest its petrodollars there as the nation struggles to comply with the terms of a $99 billion financial rescue package. For 500 years, Angola was Portugal's biggest and richest African colony, with huge reserves of oil, gas and diamonds. The event marks something unique in world history since Columbus…

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]]> admin@namecake.com (John Daly) Tue, 17 Jan 2012 4:07:12 GMT http://oilprice.com/Finance/the-Economy/Out-Of-Africa-Portugal-Solicits-Angolan-Investment.html Argentina's Booming Economy Proves There Can be Life After Default http://oilprice.com/Finance/the-Economy/Argentinas-Booming-Economy-Proves-There-Can-Be-Life-After-Default.html Quick. Name the country whose economy despite the global recession nevertheless expanded 9.2 percent in 2010 and has kept growing in 2011 at an annual rate of about 8 percent. Still unsure? The nation defaulted on part of its external debt, roughly $93 billion, at the beginning of 2002 after undergoing three years of brutal recession. Argentina, Latin America's third largest economy. Quite a turnaround in nine years, when the nation quickly became a pariah state, foreign investment fled the country, and capital flow towards Argentina ceased almost…

]]> admin@namecake.com (John Daly) Tue, 17 Jan 2012 3:59:03 GMT http://oilprice.com/Finance/the-Economy/Argentinas-Booming-Economy-Proves-There-Can-Be-Life-After-Default.html G20 and BRICs - Who's in Charge? http://oilprice.com/Finance/the-Economy/G20-And-BRICs-Whos-In-Charge.html As the representatives of G20 nations gather in Cannes, thrashing out a new way forward for the ailing European Union's economies, a major yet little observed economic sea change is underway, as the torch is passed from Europe's capitalist systems, forged over the past four centuries, to countries considered until a couple of decades ago "Second" and "Third World - the BRIC nations of Brazil, the Russian Federation, India and China. While it is as yet unclear what form this historic and dynamic shift will ultimately take, investors would be…

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]]> admin@namecake.com (John Daly) Tue, 17 Jan 2012 3:57:37 GMT http://oilprice.com/Finance/the-Economy/G20-And-BRICs-Whos-In-Charge.html The Faustian Bargain has Enabled an Unsustainable Economic System, but Not for Much Longer http://oilprice.com/Finance/the-Economy/The-Faustian-Bargain-Has-Enabled-An-Unsustainable-Economic-System-But-Not-For-Much-Longer.html Historically people have shifted their belief systems in various ways. The Greeks and Romans believed in numerous gods and goddesses and attributed all kinds of powers to them. Then the great monotheistic religions came along and people began to believe in just one god, though they honoured him under different names. Recently, beliefs have shifted again, with people worshipping just one part of a god, the invisible hand. Thanks to Adam Smith and those who followed him, especially the current neoclassical economic theologians, we have seen such…

]]> tverberg@oilprice.com (Gail Tverberg) Mon, 09 Jan 2012 23:08:16 GMT http://oilprice.com/Finance/the-Economy/The-Faustian-Bargain-Has-Enabled-An-Unsustainable-Economic-System-But-Not-For-Much-Longer.html Is a Green Economy too Expensive in the Current Environment http://oilprice.com/Finance/the-Economy/Is-A-Green-Economy-Too-Expensive-In-The-Current-Environment.html There is a looming battle over the cost of energy between the ‘green at any cost’ versus the ‘green enough at a reasonable cost’ where wind/solar forces will battle natural gas—you can sense the fog of war ahead as the battle is being set up. The policy landscape has been designed to drive toward clean energy policies sometimes without much regard to the cost. It started with environmental groups challenging our polluting ways. Over time those views gained mainstream acceptance and today there is broad…

]]> huntga@oilprice.com (Gary Hunt) Mon, 09 Jan 2012 22:59:17 GMT http://oilprice.com/Finance/the-Economy/Is-A-Green-Economy-Too-Expensive-In-The-Current-Environment.html China's Bubble of Rapid Economic Expansion Could Soon Burst http://oilprice.com/Finance/the-Economy/Chinas-Bubble-Of-Rapid-Economic-Expansion-Could-Soon-Burst.html China's problems are piling up, just when the celestial kingdom is attempting an orderly handover of power. Since China's wild grab for commodities over the past 2 years has been a powerful driver of global energy markets, it will be interesting to watch global commodities markets as the China bubble begins to deflate. In economics, "cycles are forever." But China's insular government and its massive population are unfamiliar with economic concepts such as "what goes up, must come down." Watch and learn. Chinese stocks are flashing warning…

]]> thyu@oilprice.com (Al Fin) Thu, 15 Dec 2011 23:40:59 GMT http://oilprice.com/Finance/the-Economy/Chinas-Bubble-Of-Rapid-Economic-Expansion-Could-Soon-Burst.html Iraq: An Army of Soldiers to be Replaced by an Army of Businessmen http://oilprice.com/Finance/the-Economy/Iraq-An-Army-Of-Soldiers-To-Be-Replaced-By-An-Army-Of-Businessmen.html After nearly nine years, all US Forces are mandated to withdraw from Iraqi territory by 31 December 2011 under the terms of a bilateral agreement signed in 2008. Now the job facing the war-torn country is to re-build its economy. On Tuesday, prime minister Nouri al-Maliki gave a presentation to more than 400 executives representing a wide range of industries including petroleum, engineering and construction, commercial aviation, architecture, maritime cargo and financial services; the leaders of American commerce and industry, to proclaim Iraq’s…

]]> burgessj@oilprice.com (James Burgess) Wed, 14 Dec 2011 23:54:39 GMT http://oilprice.com/Finance/the-Economy/Iraq-An-Army-Of-Soldiers-To-Be-Replaced-By-An-Army-Of-Businessmen.html What Does China's Reduction in Oil Imports and Trade Suggest? http://oilprice.com/Finance/the-Economy/What-Does-Chinas-Reduction-In-Oil-Imports-And-Trade-Suggest.html Several articles have come out recently drawing on November oil imports, trade and electricity data to suggest China is slowing rapidly and potentially heading for a hard landing. The FT reported this week that Chinese export and import growth both decelerated in November, suggesting Beijing could soon halt appreciation of the renminbi as a result. A move added some credence by comments made by the former vice-prime minister, Zeng Peiyan, and a senior delegation of Chinese business leaders to a New York gathering of hedge funds and bankers seen…

]]> Burnss@oilprice.com (Stuart Burns) Wed, 14 Dec 2011 23:31:20 GMT http://oilprice.com/Finance/the-Economy/What-Does-Chinas-Reduction-In-Oil-Imports-And-Trade-Suggest.html China’s Economy Threatened by Water Shortages http://oilprice.com/Finance/the-Economy/Chinas-Economy-Threatened-By-Water-Shortages.html Companies in China that use water efficiently will be better positioned to profit in an economy increasingly at risk from water stress and new water regulations, according to analysis by HSBC. Nine of China’s 31 provinces suffer from extreme water scarcity and 11 are very water inefficient, the bank says in its China’s rising climate risk report. The economies of 14 provinces could be at risk from water stress, because they rely heavily on manufacturing industries, it said. Government has recognised this and has responded with a target…

]]> cundy@oilprice.com (Christopher Cundy) Wed, 09 Nov 2011 23:57:57 GMT http://oilprice.com/Finance/the-Economy/Chinas-Economy-Threatened-By-Water-Shortages.html Rough Seas Ahead for Brazil's Booming Economy http://oilprice.com/Finance/the-Economy/Rough-Seas-Ahead-For-Brazils-Booming-Economy.html Brazil has fared better than most over the last year or two. True, the country does have a problem with inflation, which has proved stubbornly hard to contain, and a strong currency has caused severe problems for Brazil’s exporters. Yet the country has low unemployment (part of the reason they have strong wage inflation), robust growth, and a trade surplus of $20.3 billion in 2010. All is not quite as solid as it seems though, according to an FT article. Except for the export revenues of one company, that surplus would have been a deficit.…

]]> Burnss@oilprice.com (Stuart Burns) Mon, 07 Nov 2011 13:29:55 GMT http://oilprice.com/Finance/the-Economy/Rough-Seas-Ahead-For-Brazils-Booming-Economy.html 2012 and the Coming Financial Crises http://oilprice.com/Finance/the-Economy/2012-And-The-Coming-Financial-Crises.html It looks to me as though 2012 is likely to be a truly awful financial year, with several crises converging: 1. Either very high oil prices or recession,2. The US governmental debt limit crisis,3. The Euro crisis,4. The Chinese debt problem,5. Debt deleveraging in the US and elsewhere,6. Further MENA (Middle East/North Africa) political problems, and7. Conflict between need for greater resources and pollution issues. It seems to me that we may be reaching “Limits to Growth,” as foretold in the book…

]]> tverberg@oilprice.com (Gail Tverberg) Tue, 25 Oct 2011 12:44:08 GMT http://oilprice.com/Finance/the-Economy/2012-And-The-Coming-Financial-Crises.html European Debt Crisis: Is This the Beginning of the End? http://oilprice.com/Finance/the-Economy/European-Debt-Crisis-Is-This-The-Beginning-Of-The-End.html Almost exactly two years since the onset of the Greek debt crisis, the European Commission has set out to create a comprehensive strategy to rein in the crisis and return to a viable path of economic prosperity. The deadline: Sunday, October 23. With fiscal instability and credit contagion continuing to rock markets internationally, the world’s leading economies emphasized the need for immediate action at the recent G20 meeting. The group of finance ministers and central bankers pressured Europe on Saturday to “decisively address the…

]]> tsp@oilprice.com (Top Stock Portfolios) Thu, 20 Oct 2011 13:51:56 GMT http://oilprice.com/Finance/the-Economy/European-Debt-Crisis-Is-This-The-Beginning-Of-The-End.html