Is Capital Creation Beating Capital Consumption?

By Keith Weiner – Re-Blogged From Gold Eagle

We have written numerous articles about capital consumption. Our monetary system has a falling interest rate, which causes both capital churn and conversion of one party’s wealth into another’s income. It also has too-low interest, which encourages borrowing to consume (which, as everyone knows, adds to Gross Domestic Product—GDP).

What Is Capital

At the same time, of course entrepreneurs are creating new capital. Keith wrote an article for Forbes, showing the incredible drop in wages from 1965 to 2011. There was not a revolution, because prices of goods such as milk dropped at nearly the same rate. The real price of milk dropped as much as it did, because of increased efficiency in production. The word for that which enables an increase in efficiency is capital.

Or, to put it another way, capital provides leverage for productive human effort. We don’t work any harder today, than they did in the ancient world (probably less hard). But we are much richer—we produce a lot more. The difference is capital. They had not accumulated much capital. So they were limited to brute labor, to a degree which we would find shocking today.

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American Energy Boom

By Michael Bastasch – Re-Blogged From WUWT

President Donald Trump touted booming American energy production and exports during his State of the Union Address Tuesday night to thunderous applause, but not from Democrats.

“We have unleashed a revolution in American Energy – the United States is now the number one producer of oil and natural gas in the world,” Trump said. “And now, for the first time in 65 years, we are a net exporter of energy.”

Republicans stood up and cheered the news, while Democrats stayed in their seats. However, Democratic West Virginia Sen. Joe Manchin applauded Trump’s touting of booming American energy production.

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U.S. Set To Pump More Oil Than Russia And Saudis Combined

In a major shift, the United States is set to produce more oil and liquids than Russia and Saudi Arabia combined by 2025.

In Rystad Energy’s base case oil price scenario, US liquids production is forecast to surpass 24 million barrels per day over the next six years, thereby outpacing the combined output from Russia and Saudi Arabia.

oil rigs

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OPEC, Allies Struggle to Fully Deliver Pledged Oil Output Boost

By Thomson Reuters – Re-Blogged From Newsmax

OPEC is struggling to add barrels to the market after agreeing in June to increase output, an internal document seen by Reuters showed, as an increase in Saudi Arabia was offset by declines in Iran, Venezuela and Angola.

The Organization of the Petroleum Exporting Countries and allies agreed in June to boost supply as U.S. President Donald Trump urged producers to offset losses caused by sanctions on Iran and to dampen rising prices.

opec in capital blue letters ato four black barrels on white background

The “Productivity Of Debt” Myth

By Steve Saville – Re-Blogged From http://www.Silver-Phoenix500.com

Page 4 in Hoisington Investment Management’s latest Quarterly Review and Outlook contains a discussion about the falling productivity of debt problem. According to Hoisington and many other analysts, the problem is encapsulated by the falling trend in the amount of GDP generated by each additional dollar of debt, or, looking from a different angle, by the rising trend in the amount of additional debt required to generate an additional unit of GDP. However, there are some serious flaws in the “Productivity of Debt” concept.

There are three big problems with the whole “it takes X$ of debt to generate Y$ of GDP” concept, the first being that GDP is not a good indicator of the economy’s size or progress.

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US Set to Become World’s Top Oil Producer

Re-Blogged From Newsmax

The U.S. government sees oil production further climbing next year even amid transportation logjams in the country’s most prolific shale play.

The Energy Information Administration sees U.S. crude output averaging 11.8 million barrels a day in 2019, up from its 11.76 million barrel a day estimate in the June outlook.

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Gold-Stock Summer Lows

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The gold miners’ stocks have been drifting sideways to lower like usual in their summer doldrums. They are likely near their major seasonal lows ahead of a strong autumn rally, a great buying opportunity. Gold rebounding higher will be the primary driver fueling the gold-stock advance, dispelling today’s bearish psychology. And strong Q2 production growth will likely play a sizable role in restoring favorable sentiment.

Market summers have long been gold’s weakest time of the year seasonally. Junes and early Julies in particular are simply devoid of the big recurring demand spikes seen during most of the rest of the year. With traders vacationing to take advantage of warm sunshine and kids being out of school, markets take a back seat. So there’s no outsized gold buying driven by income-cycle or cultural factors this time of year.

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