Money everywhere

Audio –

17:02 min.

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  • NascentMind

    I’v noticed a lot of energy, and economy talk up of late. I think there is a bad news fight back afoot.
    BP Energy outlook for 2030. Just released. I was going to post it but changed my mind.

    http://www.youtube.com/watch?v=3_LT9nL4gVQ 

  • CSArichardo

    On the oil reserves, the observation might be right assuming no increase in demand !  But we know the world demand continues to rise … and this is not discussed or factored into his arguement. Saying that reserves increased 1.6 times over consumption during this short period of time (2007 to 2009) where oil usage has declined/flat lined due to a global recession is cherry picking the numbers.  However I am too lazy to actually get the information out to prove it but here is an arical that shows the drop in consumption over the period he was taking about.

    http://www.economist.com/blogs/dailychart/2011/06/oil-production-and-consumption
    .

    • Willbick

      does europe really consume less oil now than it did in the late 1970s??

  • snedmeister1

    Evening Nick…

    I thought you explained the FED interest rate for reserves quite well in your comment…

    I agree it would seem to be, in my opinion, to ensure the inter bank rate doesn’t fall too low…

    ie, all the banks with excess reserves try to lend them out, but if the other banks are also flush, there won’t
    be a big demand, thus the inter bank rate would fall below where Benny wants it….

    The FED rate, again in my opinion, gives a bottom level to the inter bank rate by paying interest on reserves held with them, as what bank would lend money out at 0.1% return to another bank, when the FED pays 0.5% on the same amount…?? ( Rhetorical question..:) …)

    Hello Nick…

    • http://overthepeak.com/wordpress/ Mystic

      If it wasn’t for you Sned, I would close the comment section down.

      Imagine when / if the Fed starts tightening…..The first thing most people think they would do, would be to stop paying that interest (to chase the money into use in the real world)……then the Fed raises the interest paid on reserves and the world will go mad~!
      With so many reserves, I can’t imagine how they will be able to raise FFR by normal REPOs~!?

      • snedmeister1

        Morning again Nick….

        To be honest, I haven’t thought about the FED tightening, and I doubt they do either…???
        As you have noted a couple of blogs ago, we are following Japan’s lead here….( intentionally or not would be by the by really )…

        Unless we get to a point where MMT is really grasped by Gov’ts, we are going to slowly wind down….
        Gently but surely ( in my opinion again )….

        In my mind, the FED are going to continue their policy of low rates… 
        We need people’s debt load to decrease, while spending and job creation to increase, to get out of this hole….
        That can’t happen without Gov’t playing their role ( MMT again )….

        Again, only in my opinion, the FED won’t even contemplate raising rates unless the economy picks up ( which
        it won’t do, on it’s own )….

        Back to your point, about how they ‘could’ raise the FFR, I would assume they would have to perform some
        sort of compulsory asset swaps…??? 
        The banks lending big again, ( reducing the amount of excess reserves as a ratio of loans etc ) wouldn’t do it on it’s own, as these excess reserves are huge now….!!???  

        I agree that it is unimaginable to perceive how they might reverse the trend they have made, but in my
        mind, it is more unimaginable to perceive why they would ever want to….!!!

        P.S. I hope your fire wood is well stocked… We have a big freeze coming here, which probably means
        you do too…..!!!!???

        • http://overthepeak.com/wordpress/ Mystic

           I am throwing wood in like a stoker on an old steam choochoo.  Stock should last.  I have the same scare every year and it always holds out.  (failing that I have identified `spare wood` lying about in the fields around us.

          Yes, this is looking very Japanese.  I can’t see it getting bad enough to force any sort of major re-thinks either.
          Slow grind down it is.

  • CSArichardo

    I think I might have to agree that the IMF is not a bank !?  They have created or allocated (how MMT of them ?) over the years a few hundred billion SDRs and act as a broker between nations in loaning them out among each other.  Not enough to bail out Europe but some of this SDR money will probably get loaned by willing nations brokered through the IMF !

    Hence the ECB is going to have to print or allocate Euros (as per the article) and lots of them, just like the US has to create more US dollars, the British more pounds and the Japanese more yen.  Remember that a SDR is made up of a fixed ratio of each of currencies so in theory the world has more SDRs except they are not traded like that, not yet.   My guess is there is some balance act occuring that no currency gets too inflated head of the others but who knows?!

    • http://overthepeak.com/wordpress/ Mystic

      You are still the undisputed expert on them (I just can’t get my head round the whole concept~!).

      • CSArichardo

        I like it better when you give me shit!  Think yourself . Have I heard that somewhere before?  :)

  • Willbick

    The lack of peak oil stuff in the MSM is amazing. The Oil Drum website is the place to go to. And how someone can have the nerve to write a piece saying basically that everything is fine in the world of fossil fuels when the price of oil has been over $100/barrel for over a year is quite something! Just goes to show that bloomberg will publish any old crap. I suppose u could say the MSM wants opinions rather than facts.

    • http://overthepeak.com/wordpress/ Mystic

      It is a worry.  The FT and Economist also seem to lack any real energy journalists.
      The biggest worry for me, is that I don’t think it is any sort of conspiracy…..It is simply that they don’t see it as important.

  • kraymes

    Glad to see the Mystic take that last slide quotation apart.  The Limits to Growth standard model 1972 unrevised plot still seems to my world view to be the one thing that has predicted the future in the last 27 years since.  I came across plot in 1985, unreferenced, in the back of 1st year Geology textbook and had a moment of clarity that I’ve only experienced a couple of other times in my life.
    Who knows; that model will probably turn out all wrong and the Singularity and John Galt will lead us to a golden age.As for Daniel Yergin, I don’t know anyone who was more wrong about the direction of the price oil from 2003 to 2007.  I haven’t listened to him since then.  I sat and listened through some of his self aggrandizing re-branding book tour interviews as “green” energy guru of 2011; what smooth operator, take note, never admit your mistakes and act like you were leading the parade from the beginning.   

    • http://overthepeak.com/wordpress/ Mystic

      I would love to `take apart` the people who knock `Limits`, but most people don’t even know what it is.
      As I just commented above, the MSM just doesn’t seem to think energy is an issue.

      I am going to guess that they see Carter as an idiot and don’t want to be looked on as idiots…….but that is a stretch of my imagination to find some reason why MSM does not see `energy journalism` as a serious line~!? 

  • Cba2004

    who is Ms mystic? the cat prehaps?

    • Lyle

      The cats name is Puppet – I believe.  Haven’t seen Puppet for a while. Used to be his lap cat quite often during vids.
      Ms Mystic is Nick’s wife.  :)

      • Cba2004

        oh ok, i get it now I was wandering who ms mystic was because we never saw nobody beside the cat…