The Price Of Oil Is Collapsing Again: Economic Armegeddon Coming

An increase in the quantity of money and fiduciary media will not enrich the world. … Expansion of circulation credit does lead to a boom at first, it is true, but sooner or later this boom is bound to crash and bring about a new depression. Only apparent and temporary relief can be won by tricks of banking and currency. In the long run they must lead to an all the more profound catastrophe.  –  Ludwig Von Mises

The price of oil continues to collapse, reflecting a rapid contraction of the demand function connected with economic activity.  This is a global phenomenon and the countries with the largest economies – e.g. China, the U.S., the EU and Japan – are contributing the most to the economic contraction.   Click to enlarge:

OIL

The equity financial bubble in the U.S. continues to inflate today. It is setting up a crash that will take most of the country by surprise. It’s hard to see the truth when the only news to which you are likely exposed is propaganda-laced soundbytes seeded with lies and fraud.

Sorry Janet and Stanley, but this graphic below reflects information about the economy that clearly you are not picking up in your “ivory tower” econometric data pools and algorithms – click to enlarge:

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It’s hard to hide the truth when there’s still checks and balances around to counter-balance the Orwellian fog that is engulfing our system. How long those “checks and balances” will be allowed to exist is anyone’s guess but eventually forums like this will be snuffed out by an ever-oppressive Government.

As John Embry said to me recently: “when the balloon on this pops, we’re going to wish that we were on another planet…”

14 thoughts on “The Price Of Oil Is Collapsing Again: Economic Armegeddon Coming

    1. How can the “liquidity” be debt-free. Read what it says at top of every dollar bill: “Federal Reserve Note”

      You statement makes zero sense…negative sense.

  1. The thing about oil, although I haven’t been following it much the last couple years, is that I believe the shale plays have to pump regardless of the price since they need the cash so much due to their ponzi financing, so even if the price goes down, they still pump regardless so that may be one factor why oil is plummeting so hard, because supply doesn’t dry up like it should when demand drops, and there is very little excess storage capacity around the world, and this forces price way down until the regular plays start curtailing supply.

    1. Only if the government wants to keep interest-rates low for itself (at least in the short-term). Otherwise, no country really needs to devalue its money in order to “keep up” with anyone. We were just fine when Zimbabwe went hyper, for example, and the whole business of being an export-nation is just a distraction from the fact that you can’t have trade-deficits forever. In the end, goods must be traded for goods, nothing else, but all governments aren’t interested in fair trade…so they’ll choose economic destruction.

  2. Follow you every day even though I rarely post. Good stuff. Dave. Thanks for your work.

    Since Japan is heavily dependent on energy imports to keep things running, wouldn’t they see this drop in oil prices as an opportunity? I would think they would have full oil tankers lined up all across the Pacific while the getting is good. Your thoughts, Dave?

    1. I think the drop in oil reflects growing economic weakness in Japan as well as here, China and the EU. It costs money to store oil for the future and it sounds like the worlds storage terminals are full.

  3. Well, I don’t want to smell up the place, but we COULD have debt free liquidity if we got over this fixation on currency being created only by the banking system. We’ve been brainwashed into believing that’s the only way money can be created, through loans made by the banks. In a free world we would have at least three types of money – silver and gold freely minted by the US Treasury upon presentment, bank issued checking account money as we have today, and directly issued US Treasury dollars issued to pay for anything except transfer payments, i.e. anything requiring work or asset forfeiture to the government. The three would trade freely and interchangeably at exchange rates set by a real market uninfluenced by the banking system rigging prices via phantom currency supply by way of derivatives. Silver, gold and directly issued Treasury dollars would be debt free liquidity.

    1. “bank issued checking account” money is not money. It’s loan to the bank by the depositor. It’s credit instrument with increasing amounts of counterparty risk. “Treasury-issued” dollars pay for transfer payments. How else would they be paid?

      1. When I refer to so called “checking account money” I’m simply referring to what people normally think of as money in the banking system. Every loan ends up being a deposit somewhere in the banking system and this is how all money in our current system is created, through debt. We all know that’s an unsustainable system if it is the only way money can be created. But that’s what we now have. By transfer payments I’m just referring to government giveaways for nothing in return – the dole. This has to be paid via a transfer commonly known as a tax. What I’m driving at is that the Treasury could and should directly issue US dollars to pay for infrastructure and labor where there is a real and fairly priced transfer of value and the need for borrowing and taxation would be dramatically reduced. Three forms of money – directly issued Treasury dollars (debt free), bank loans that become deposits (the present scam), and undenominated hard metal coins and bullion accounts, all trading freely against the other. This system wherein all money in existence, except for the 3% that is physical, bearing interest to a parasitic banking system has to end.

        1. There is a theory that this is why JFK was assassinated, because he tried to bring in direct, interest-free Treasury money. The bankers own the country and will not relent in their debt backed slavery until they are forced out by a bloody revolution.

          1. The psychopaths running this system really seem to want blood because they just keep pushing and pushing this system to the breaking point. Violence never solves anything in a rational situation, but this situation is anything but rational. I’m afraid you may be correct. The tree of liberty is crying out for refreshment.

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