Boom Bust and Politics

I don’t often touch on the subject of politics, but it is interesting to note that neither of the two candidates has any idea what to do about the economy, maybe that is good, maybe that is bad. But in truth or in theory- the notion is that our economy is self adjusting, and left somewhat to its own devices it will purge and move on. The problem is we have tried to avert crisis for so long- usually by government or central bank intervention… i.e. remember some of the crisis’s of days gone by: Long – Term Capital Management collapse, the Asian Contagion, the Internet Stock Market Bubble followed by the Real Estate Bubble, now the current cycle Commodities Bubble (while still in the midst of one crisis as another emerges). The cycle of boom and bust seem to be more rapid than ever. All I can say is everything seems to happen real time with all this information. And there is the drone of a thousand analysts on the sidelines giving the play by play, and with a few notable exceptions way off base.

So Oil up 40% year to date, there is a lot of debate as to what that means, and whether or not we are suffering from inflation in the traditional sense. The difference between now and the 70’s is wages are not going up, and the supply of money is not going up out of control, or so they say, it could be these new liquidity injections and so forth into the banking system are stealth ways to add money. So now we find the basic needs of society are being priced out of reach. Is it going to have to reach some sort of crisis before anyone does anything ? And by anyone I mean those people in power with the bigger cushion of wealth to protect them, the ones that can put people to work, and the ones that $4.00 gas is really no big deal what is all the fuss? An interesting side note is this, the U-4 Unemployment rate is running close to 10%, this includes workers who have given up on looking for work.

Much of our problems could be expectations. In order to grow society and wealth, we need more of everything, more demand increases prices, but consider the Europeans:

Europeans schedule activities, use public transportation, share, and do without. They are more apt to live in a small apartment or flat, travel and have lavish meals as they learned long ago by culture, to live for the experience rather than collecting things which, is the norm in this society.

And how about oil when we compare ourselves to the rest of the world:

Worldwide oil consumption is about 87 million barrels of oil per day.

We consume 25% of that alone in the U.S.

That's about 22 million barrels of oil a day.

That works out to about 11 supertanker loads.

Those big black tank rail cars you see hold about 26,000 gallons.

So at 42 gallons per barrel, 22 million barrels works out to some 924 million gallons.

At 26,000 gallons per car, it would fill over 35,000 tank cars. Per day.

I am going to try and take some time out, even if only a day, and get my compass aligned again. The magnetic poles get influenced by too much magnetic fields acting on it all the time, and I forget the real me, which does not always correspond to what others think that may be. The biggest mistake in life is to try and define oneself, for you are undefinable, infinite, and without any limitations.

-m