Perfectlap |
01-13-2015 09:51 AM |
Quote:
Originally Posted by Giller
(Post 431570)
Not necessarily. There is a lot of talk that oil could go down down down much more. If that's the case, it could cause a lot of grief to both the US and Canadian economies. If oil prices fall too much - it just won't be cost effective to get the oil out of the ground - will be cheaper to bring it in from overseas.
It's sad - but we actually need oil prices at a 'higher' level for the good of the whole economy. (not crazy high, just high enough to make it profitable).
When people talk about those low oil prices and cheap gas - remember, that oil all came from the middle east. So we can go back to depending on them for our oil or we can pay a bit more for it and dig it up here.
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That's all it is talk. Oil prices will be back up because lower prices globally will lift aggregate consumption. Some analysts project a half point increase in global GDP from ~$50 oil. The longer these low prices stick the more consumption of just about everything will pick up (the best stimulus there is for the U.S. consumer) which of course shifts the all important expectation of demand back in a bullish direction. Global production was exceeding actual demand even back when oil was pinned above $100. Yet the prices would not budge! Evidently the speculators expected demand in the faster growing economies to keep plowing ahead despite the excess production.
Obviously they don't expect that to be the case in the near term anymore but you can't stop countries with low debt, growing populations, easy access to capital, and improving infrastructures to just grind to a halt forever. The expectation of demand can turn on a dime. I remember in 2008 or there abouts when oil prices shot north in the middle of the trading day because some news site reported a gun boat battle in the Gulf... that happened two days prior.
Quote:
Originally Posted by thstone
(Post 431642)
I think a more accurate statement is that the rich are getting richer by leaps and bounds as the truly poor merely inch upwards over time.
The bottom line is that everyone, rich and poor alike, get richer each year (but by differing amounts).
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I believe that the middle class are actually getting poorer when you factor in all their long-term commitments and their higher expected household contributions. For instance, the savings rate in America is still barely 1-2% but the cost of just about everything but oil is rising. Unless the typical American has some portion of their savings in aggressive investments, (that ends well) this math of what's coming in vs. what's going out doesn't really add up over the course of a working life. I'm not sure how any growth in net worth can be expected running a household deficit and the fact that people are no longer getting rich from owning their homes. Wage increases for the majority haven't been anything to write home about since we were putting people on the moon.
Agree on the wealthy. This is about the best time ever to be an investor. Low taxes relative to just about every other advanced economy, plenty of corporate global growth to see your LTCG rise indefinitely.
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