Monday, January 05, 2015

Huh. So - low oil prices are not good for the economy? Said in the most sarcastic way.

Make no mistake - I do think low energy prices built this country and in theory should be a huge positive. But, there are the way things should be - and then there are the way things are. 

In a deflationary environment psychology starts to rip apart textbook economics. In a deflationary environment - wages go down. Hell, during the worst of the recession half of the companies in The Valley had their people on at least 10% pay reductions. And everyone sucked it up because it was better than the alternative. Oil also was around 40 bucks a barrel. And you can see how much that helped the economy back then.

You guys should be happy I'm going to try and get "not too lost" in the desert. I was up for an hour this morning before I heard someone say the word deflation. Which is pretty effing scary considering I was the only one insisting we would have deflation before the end of last year. Now it seems to be the general consensus.

I presently do not know of one country that isn't at stall speed. Last night even Australia said they were entering recession. Which is really troubling. They were strong throughout the recession.

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