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Why the economy was slow in Q1

Venezuela doesn't really tip the scale at all anymore. We used to get a much bigger chunk from them, but we also used to get a much bigger chunk from Persian Gulf countries.

Bottom line: OPEC is the biggest factor in oil prices; oil interests have driven and continue to drive U.S. policy; the quicker we do an end-run around the oil interests and focus on natural gas, the better, pretty much in every way.
 
bigdoublezero said:
Venezuela doesn't really tip the scale at all anymore. We used to get a much bigger chunk from them, but we also used to get a much bigger chunk from Persian Gulf countries.

Bottom line: OPEC is the biggest factor in oil prices; oil interests have driven and continue to drive U.S. policy; the quicker we do an end-run around the oil interests and focus on natural gas, the better, pretty much in every way.
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I'm not disagreeing with you regarding natural gas. I was responding to LK when he said the vast majority came from an unstable region. That statement, IMO, was misleading.

Nevertheless, I'm still waiting for a clear and cogent response from our resident "Blame Barry for everything" crowd about the proposed austerity from the tea party and its economic effects.
 
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A huge part of the problem is the systematic devaluation of the dollar that Obama and the Fed have undertakend over the last 2 years. That is at least partly responsible for the rise in gas prices as well as the (denied) inflation in other areas that we are experiencing. QE1 and QE2 have totally wrecked the financial structure of our economy. Nobody wants dollars anymore.

http://www.marketwatch.com/story/wal-mart-ceo-consumers-feeling-greater-pressure-2011-04-27
 
Um, gas prices rose because the entire Arab world is in various stages of revolt. Nobody expects them to stay where they are over the long term.

QE has done a pretty decent job. The lower dollar value might not be all that bad for us. Makes global trade more advantageous. Worked for the Chinese.
 
WakeNBake - I stand corrected. Not a vast majority.
 
WakeandBake said:
the vast majority of our oil is imported from Canada and Mexico
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your point is well taken, but a vast amount (perhaps not a majority, but a lot) of the world's oil comes from backwards-ass countries with a lot of turmoil, and the worldwide markets have a direct effect on the price of the oil we get from Canada and Mexico.
 
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I am not a blame barry person. i think there is a middle ground between the tea party craziness and the "nothing to see here, deficits and entitlements are not a problem" approach some on the far left are currently taking.

There is no question that reducing government spending will have some negative short-run economic effects. Layoffs in the defense industry, local economies damaged by Federal facility closures, losses of government jobs all have a negative economic effect in the short run.

In the long run, though, unless we get entitlements and the deficits under control we'll be spending more on interest than we are on defense and we won't be able to pay for ANYTHING except health care. The economic carnage that will ensue when the rest of the world decides to stop buying our debt will dwarf these short-run effects you are worrying about. Thus, the sooner we start fixing it the less painful it will be. You can't keep saying "not yet" forever. At some point, you have to say, "if not now, when?"
 
bigdoublezero said:
Um, gas prices rose because the entire Arab world is in various stages of revolt. Nobody expects them to stay where they are over the long term.

QE has done a pretty decent job. The lower dollar value might not be all that bad for us. Makes global trade more advantageous. Worked for the Chinese.
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Ummm...guess again. http://www.ibtimes.com/articles/139142/20110428/oil-prices-steady-usd-lower.htm

Here are the most relevant parts of the article:

The US Dollar Index has now declined to the lowest level since 2008 as most other major currencies continue to appreciate versus the USD. In fact the USD is currently lower versus 13 of the 16 major currency pairs and is at its weakest level versus the Euro in almost one and half years....

As shown the currency market has a very tight relationship with the direction of oil. WTI moves inversely with the USD and positively when viewed against a non dollar currency like the Euro/dollar as shown on the chart. All signs suggest that the direction of oil prices will remain highly related to the direction of the US dollar going forward.
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QE's major impact has been to prop up a U.S. stock market that would have crashed without it. Just another bubble, courtesy of your federal government.
 
WakeandBake said:
Winter Storms
Gas prices
Federal spending cuts in defense


Now tell us oh wise Obama-bashers and Tea Baggers - how do you square that with your "slash spending to balance the budget" hysteria? Wouldn't it be a logical assumption that if these events could slow growth to 1.7 percent, that slashing the federal government in the manner the Tea Party is blindly calling for in the name of a balanced budget that growth would be slowed even more and acts of God like storms would just compound the problem?
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http://news.yahoo.com/s/nm/20110428/ts_nm/us_usa_economy

I think this is a much more accurate take on the situation. Correlations can be tricky, especially for those who are eternally Baked!
 
RJKarl said:
Not a single drop of that oil would reach the market for 5-10 years.

By the way if $4+/gal gas isn't enough incentive for oil companies to drill on land they own what will be?

I think we should immedately end ALL subsidies to il companies and use that money to give grants to alternative energy start-ups.
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as opposed to investing in green energy, which would pay dividends 20-30 years from now
 
bym051d said:
http://www.nytimes.com/2011/04/15/business/global/15iht-pound15.html?_r=1&scp=3&sq=austerity&st=cse

Pain of British Fiscal Cuts Could Inform U.S. Debate

LONDON — In the United States, the debate over how to cut the long-term budget deficit is just getting under way.

But in Britain, one year into its own controversial austerity program to plug a gaping fiscal hole, the future is now. And for the moment, the early returns are less than promising.

Retail sales plunged 3.5 percent in March, the sharpest monthly downturn in Britain in 15 years. And a new report by the Center for Economic and Business Research, an independent research group based here, forecasts that real household income will fall by 2 percent this year. That would make Britain’s income squeeze the worst for two consecutive years since the 1930s.

All of which has challenged the view of Britain’s top economic official, George Osborne, that during a time of high deficits and economic weakness, the best approach is to aggressively attack the deficit first, through rapid-fire cuts aimed at the heart of Britain’s welfare state.
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And the UK's problems I'm sure have nothing to do with the state of their economy before this mess or the state of the world economy, and everything to do with cutting entitlement programs.
 
Lots of clean tech startups already receive funding from the government. Hell Tesla alone has a $465MM loan from the USDA.
 
84Deac said:
Ummm...guess again. http://www.ibtimes.com/articles/139142/20110428/oil-prices-steady-usd-lower.htm

Here are the most relevant parts of the article:



QE's major impact has been to prop up a U.S. stock market that would have crashed without it. Just another bubble, courtesy of your federal government.
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The government is trying to ensure the economic success of the country. I'm cool with that. If you're not cool with success, you should leave.

I understand that you have access to Google, but trust me. Oil prices are going to fall after summer, assuming things have been resolved in Libya and the Middle East.
 
We need spending cuts not because it will immediately help the economy (it won't) but because the longer we wait, the harder it will be for the market to ultimately correct itself.
 
The market already had a pretty freaking large correction a couple of years ago. Housing has cratered. Industry is in the toilet. There is no other correction. There's either progress or stagnation. We need to cut defense spending like crazy, pull our troops back, raise the debt ceiling, and come up with a comprehensive way to cover all Americans' medical costs (because PPACA hasn't brought down costs, and we'll never truly do away with health care entitlements, so we might as well man up as a society to take care of our citizens and try to find a way to do it as efficiently as we can. Tall order, but better than bickering over oversimplified principle). That in turn boosts domestic industry, economy, energy policy, etc.
 
bigdoublezero said:
The government is trying to ensure the economic success of the country. I'm cool with that. If you're not cool with success, you should leave.I understand that you have access to Google, but trust me. Oil prices are going to fall after summer, assuming things have been resolved in Libya and the Middle East.
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:thumbsup: You don't have a clue. I'm guessing you weren't a business or econ major. But thanks for your detailed analysis.
 
84Deac said:
:thumbsup: You don't have a clue. I'm guessing you weren't a business or econ major. But thanks for your detailed analysis.
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You want to put money down that average gas prices will be lower in October than they are right now? I'll take that bet in a second.

I'd also be willing to wager I spend much more time examining this stuff than you do. That's an easy-money wager, too.
 
Gas prices always drop after the summer months.
 
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