Valance chart
Posted by WARREN MOSLER on June 29th, 2009
Gasoline demand sort of flat year over year.
And GDP growth still negative, though less so now.
Doesn’t look like there was an serious ‘demand destruction?’
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June 29th, 2009 at 3:27 pm
No demand destruction at all. Just a normal pull back associated with reduced economic activity.
We are going to hit $200 a barrel when this recession/depression ends.
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June 29th, 2009 at 3:39 pm
I should have put an “Unexpected” or “Surprising” in there somewhere. I thought there would have been some demand destruction, but there has been very little apparent from the numbers.
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June 29th, 2009 at 4:19 pm
This is a bankers depression. The fundamentals in the essentials remain unimpaired. Only forced liquidation and margin calls can bring down commodities prices.
Another theory to consider, however, is stockpiling and supertankers sitting off the coast. How much does that contribute to this demand?
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Mike S Reply:
June 30th, 2009 at 7:05 am
We are going to have nearly 10% unemployment and 20% underemployment. This is not a bankers depression at all. I am unemployed. I consider myself to be a valuable employee who does lots of actual work. There are thousands of people out there who have been out of work for many, many months and are not getting interviews. Many people I know have been called into the office and told they are getting a 20% pay cut.
The fundamentals for oil are pretty strong on the demand side, considering we are in an economic contraction. I do not fully agree with Warren in that I think we are facing peak oil and that the Saudi’s will not be able to fully supply the world once growth resumes.
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June 29th, 2009 at 9:21 pm
probably not much as daily consumption is 85 million barrels and the amount in such storage is probably only a few days of world supply.
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June 30th, 2009 at 3:22 am
I think we should nationalize Mosler Automotive. The MT900 is such a lightweight car that gets such good gas mileage, every american citizen should drive one. This will help with our fuel demand. Building all these mt900 to give to all 200 million driving americans will also help employ a lot of laid off autoworkers. Then we can reduce the national speed limit to 30mph! Warren do you support my plan?
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June 30th, 2009 at 8:12 am
yes!
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June 30th, 2009 at 8:14 am
I think your plan would be declared unconstitutional, since driving an MT900 at 30mph would constitute “cruel and unusual punishment”…
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June 30th, 2009 at 9:09 am
Jim, it’s all relative, if you make it smaller than a mazda miata, 30MPH will seem very fast and nimble. We need an Mt900 Mini!
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June 30th, 2009 at 12:37 pm
I need real low gears in mine so i can still hold it on the revlimiter at 30
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June 30th, 2009 at 8:29 pm
For all,
Related to crude import levels and price:
I’ve linked to recent crude import levels here:
http://tonto.eia.doe.gov/dnav/pet/hist/wceimus2w.htm
If you look at the last couple of months, I’d estimate that we’re importing about 9M bbls per day avg. (Confess I didnt do the exact math)
Then the net import effect of the $30 ($40 - $70) per bbl run-up we’ve had over the same time period: 9M bbls per day x 30days X $30/bbl = about $8.1B per month or $96B per year annual rate.
So thru some channel, I guess this is crude’s recent contribution to the US account deficit.
This increase, on margin, is enough to service about $1T of external USD denominated debt for a year @ 9.6% or so +/-; in this regard it is probably important to external USD lenders for crude to hold these levels.
Resp,
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