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A Three trillion dollar redistribution of wealth...

Dittohead not!

Dittohead not!

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...due to lower oil prices


A new note from Francisco Blanch at Bank of America Merrill Lynch, however, puts the oil move into a much bigger perspective, arguing that a sustained price plunge "will push back $3 trillion a year from oil producers to global consumers, setting the stage for one of the largest transfers of wealth in human history."
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source
 
cpwill said:
Wow. Now that's cool :)
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And here we are with the interesting realization that we desire oil to go way back up again.

diagram770.jpg
 
Jetboogieman said:
And here we are with the interesting realization that we desire oil to go way back up again.

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You may - I don't. I'm not worried about our performance v the Canadian Dollar enough to give back $3 Trillion.





What I find fun about this is the way it's going to blow some minds when (assuming that they do) the people who are constantly preaching about the importance of redistribution realize that the most powerful way to do it is by increasing supply, and reducing costs of living / raising standards of living.

Bernie wants to "redistribute" ~$1.8 Trillion a year. That's the huge big price tag. It's massive, most folks say it can't be done.


Boom. The market just redistributed more than one and a half times that, just by lowering gas prices. The next time OPEC & Company try to hike prices back up, we should open up federal land to fracking, and blow them out of the water.
 
cpwill said:
You may - I don't.
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I was pointing out our ironic position is all.

But it's our own fault, you know Albertas tourism slogan at the moment is "remember to breath".

I think it should be changed to "Remember not to tie your entire economy to the price of a single commodity".
 
Hey, remember back when POTUS and everyone else was mocking the idea that we would ever get back to $2-a-gallon gas? It's $1.65 at the station I fill up at today.
 
Jetboogieman said:
I was pointing out our ironic position is all.

But it's our own fault, you know Albertas tourism slogan at the moment is "remember to breath".

I think it should be changed to "Remember not to tie your entire economy to the price of a single commodity".
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It's a two-edged sword, certainly. For places that are resource-rich like that, balancing is tricky.
 
capitalism is out-wealth-distributing socialism.

This is ****ing hilarious :2razz:
 
shrubnose said:
Not me. I'll be mighty happy if it drops to under $10/barrel.
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Be careful what you wish for. Currently production is so high because producing oil is so profitable. Make it less profitable, there will be less incentive to produce it, and with lowered supply the consumer will pay higher prices again. But a free market usually finds that comfortable optimum balance between supply and demand so that all benefit. A manipulated market is far less likely to do so.
 
cpwill said:
Hey, remember back when POTUS and everyone else was mocking the idea that we would ever get back to $2-a-gallon gas? It's $1.65 at the station I fill up at today.
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I do remember that. I also remember predictions of $10 a gallon if Obama were to be elected.
 
shrubnose said:
Not me. I'll be mighty happy if it drops to under $10/barrel.
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It will only do that under very extreme circumstances. The costs to maintain current wells at current production is around $20.00 a barrel for breakeven generalized across the US. Various regions have differing levels of breakeven point but in general it is around $20.00 a barrel. If prices go below that the wells will be shut down and or abandoned. The lowest oil has been down in recent memory is about $9.50 a barrel in 1998. If it gets that low I suggest start fishing call options and or long contracts. It don't get much lower.
 
AlbqOwl said:
Be careful what you wish for. Currently production is so high because producing oil is so profitable. Make it less profitable, there will be less incentive to produce it, and with lowered supply the consumer will pay higher prices again. But a free market usually finds that comfortable optimum balance between supply and demand so that all benefit. A manipulated market is far less likely to do so.
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Quite true.

I don't think that anyone that's paying any bit of attention thinks that these low oil prices are here to stay in any sort of long term. They are going to go back up, it's almost a certainty. The only real question is when will they.
 
Great news for the average consumer and those that believe in capitalism as the most effective way to acquire and distribute wealth. Three Trillion Dollars??? I'd love to hear Bernie's and Hillary's spin on this - especially Bernie's.
 
eohrnberger said:
Quite true.

I don't think that anyone that's paying any bit of attention thinks that these low oil prices are here to stay in any sort of long term. They are going to go back up, it's almost a certainty. The only real question is when will they.
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When and how much. Gas topped $4.50 locally not so long ago. Bringing it down to $2, even if it's going back up to $3 or so is my kind of wealth redistribution.
 
3 Trillion may sound like a lot, but that is a global figure, and it is not huge by the time it gets down to the individual consumer, unless such is a heavy user of oil or gas. Which is problematic in itself. Greater use of oil products will exacerbate global warming and air pollution, causing their own costs, even if they be somewhat down the road. Cheaper oil also helps discourage green energy research, and more efficient cars and other devices. And of course the more used today, the greater the price spike in the future when Saudi Arabia and other producers put prices back up, as they will have to without slashing budgets and social services.

If we are going to talk "redistribution", it seems to me a universal health care plan is a far more sustainable and useful goal than a short term market manipulation that has considerable downside.
 
Ganesh said:
. . . .
If we are going to talk "redistribution", it seems to me a universal health care plan is a far more sustainable and useful goal than a short term market manipulation that has considerable downside.
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But only if you are satisfied with VA type delivery of medical care (rather dismal that), and this is the established track record of a US government run single payer system.
 
eohrnberger said:
But only if you are satisfied with VA type delivery of medical care (rather dismal that), and this is the established track record of a US government run single payer system.
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Then you need a better set of tracks. They're not that hard to find.
 
eohrnberger said:
But only if you are satisfied with VA type delivery of medical care (rather dismal that), and this is the established track record of a US government run single payer system.
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Medicare does a lot better, but then, seniors vote.
 
Beaudreaux said:
Great news for the average consumer and those that believe in capitalism as the most effective way to acquire and distribute wealth. Three Trillion Dollars??? I'd love to hear Bernie's and Hillary's spin on this - especially Bernie's.
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There is a pretty good argument that Saudi overproduction is an attempt to put a damper on the newly freed up oil that Iran wants to deal as well as discourage production from the USA and also also others looking to up exports like Venezuela who is in an economic tailspin and needs money. The argument would be that Saudi is willing to even take a loss for awhile to maintain dominance.
 
Dittohead not! said:
source
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Lower oil-prices do indeed expand Consumer "ability to spend", and even promote it.

But that inducement is not automatic. People expand/contract consumption based upon very personal reasons.

So, the real economic question remains, "How much of that unspent money (on carbon-based fuels) will go to savings and how much to spending.

And why ... ?
 
cpwill said:
Hey, remember back when POTUS and everyone else was mocking the idea that we would ever get back to $2-a-gallon gas? It's $1.65 at the station I fill up at today.
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remember when they were mocking drill baby drill.
guess what we drilled and now the supply has caused the price to fall imagine that.

real economics at work once again.

the question now becomes will they continue to drill or will they let the supply lighten up a bit to cause the price to rise.
 
Dittohead not! said:
...due to lower oil prices
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The $3 trillion question: Will consumers make up for the decline in domestic energy investment? If not, oil's fall will push us into recession.
 
Lafayette said:
Lower oil-prices do indeed expand Consumer "ability to spend", and even promote it.

But that inducement is not automatic. People expand/contract consumption based upon very personal reasons.

So, the real economic question remains, "How much of that unspent money (on carbon-based fuels) will go to savings and how much to spending.

And why ... ?
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No doubt there are as many answers to that question as there are consumers.
 
Beaudreaux said:
Great news for the average consumer and those that believe in capitalism as the most effective way to acquire and distribute wealth. Three Trillion Dollars??? I'd love to hear Bernie's and Hillary's spin on this - especially Bernie's.
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Right!

I wonder how the poor of the world are going to spend their windfall?

Oh, I know...the rich will allow some of it to trickle down...right?

All said with a smile on my face. I happy it is happening...but my guess is the benefit will not be to the poor.
 
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