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Discussion Topic: Negative Oil value - the first sign of deflation?
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jpdell33 |
04-20-2020 @ 6:56 PM
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Member
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Joined: Jun 2016
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Word has it that oil futures went deep into negative
territory as fuel storage was at near full capacity.
Why? Because of a lack of demand - airplanes not
flying, cars and trucks not driving, etc. With
factories and retail outlets shut, raw materials are
not being bought, leading to their shut down.
If/when things start back up slowly, there could be
a vast surplus of labor and therefore wage
competition leading to reduced wages and a downward
spiral into serious deflation. Alternatively
commodities in short supply from shutdowns could
command extraordinary prices once demand starts to
recover triggering inflation (like the oil shocks of
the seventies). Right now with the Federal Gov't
and the Fed actually giving away money, deflationary
pressures are offsetting inflationary ones.
Stagflation from the oil shocks is what most baby
boomers experienced entering the job market.
Deflationary depression is not something most living
folks have experienced. Baby boomers like myself
have stories our parents have told us about their
parents and it wasn't pretty. Folks did anything to
earn money, and FDR didn't help matters by
confiscating gold when there was a shortage of money
flowing through the economy.
What happens next is anyone's guess now.
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bmurphy |
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04-20-2020 @ 7:45 PM
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Joined: Jul 2007
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Hi there
thanks for the input
And, THAT is what is so scary that few talk
about. The horror for so many Americans that
is right around the corner. I know I lock
my door now. Never had to think about it.
The oil price total collapse might be
an indication of what is soon at hand for our
society.
Sure hope not.
Take care
Bill
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jpdell33 |
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08-17-2020 @ 12:32 PM
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Member
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Joined: Jun 2016
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With nearly half of America wondering if they can
pay next month's mortgage or rent bill, that would
be a certain sign of deflation. With the Fed
printing presses running full steam it is staving of
the reality with inflationary policy. Meanwhile
those not in worry of meeting their housing costs,
are plowing money into a market that is insanely
overvalued. This house of cards has got to collapse
soon. When it does it may be years or decades (or
like the western Roman Empire) or even centuries.
Good luck to all and meanwhile hold gold and silver
in coins. Gold and silver bars are easily redeemed
for household expenses, and gold ETFs will vanish
overnight when a run on claims begins.
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