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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
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It is RT, so yes.
by IM on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
the issuer of the world's reserve currency.. needs to issue debt that others can hold...
Absolutely true, and the US has embraced that requirement with gusto. But that is entirely aside from the questions of if and when being the issuer of the world reserve currency is a good idea for the citizens of the issuing state. It has obviously been very good for the financial elite.

I am also aware of the Triffin Dilemma, which proved fatal to the gold standard under the Bretton Woods System. Now the question becomes one of its effect under the current international monetary regime, to the extent that there really is one  cobbled together mess that it is, relying on FX rates, currency swaps and arbitrage. In order for that system to be reasonably secure there needs to be a deep pockets dealer of last resort for FX arbitrage.

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
The article (by Dmitry Kalinichenko) can be found on goldbug sites and conspiracy sites (why do they go together?), and particularly via pro-Russian propagandist Vineyard of the Saker, who links to it (in its French version), on the site of extreme-right fake-left Jewish-world-plot friend of Dieudonné, Alain Soral. None of which I'll link to.
by afew (afew(a in a circle)eurotrib_dot_com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
And the US$ is still the de facto world reserve currency, so the USA has simply been able to create dollars and use them to pay foreign debts, which only exacerbates that situation, as it creates an ever increasing supply of dollars to accompany and ever increasing cumulative trade deficit.
In order to have a reserve currency people need to be able to hold it. Which means that US, as the issuer of the world's reserve currency, needs to issue debt that others can hold, i.e., indebt itself to others.

by Migeru (migeru at eurotrib dot com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
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Yes, this looks like a classic price war strategy on the part of the Saudis.

by Migeru (migeru at eurotrib dot com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
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Not so long ago, British scientists have successfully come to the same conclusion, as was published in the Conclusion of the U.S. Geological survey a few years ago. Namely: Europe will not be able to survive without energy supply from Russia. Translated from English to any other language in the world it means: "The world will not be able to survive if oil and gas from Russia is subtracted from the global balance of energy supply".
This is nonsense. The collapse of oil prices on the refusal of OPEC to cut production means that as of right now Russian supply is basically superfluous.

by Migeru (migeru at eurotrib dot com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
No matter how strange it may seem, but right now, Putin is selling Russian oil and gas only for physical gold.

Putin is not shouting about it all over the world. And of course, he still accepts US dollars as an intermediate means of payment. But he immediately exchanges all these dollars obtained from the sale of oil and gas for physical gold!

Putin is dealing with financial sanctions from the US and its allies and facing the possibility of an Iran-like trade blockade. In that context it makes no sense to accumulate US dollars.

by Migeru (migeru at eurotrib dot com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
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The US$ has strengthened against other currencies since the oil price decline took off this summer. This may be especially true for petro-currencies. The US has an advantage there because it is still a net importer of oil, so falling oil prices cuts our trade deficit - if less so than when the imports were larger and the prices higher.

The truth is that all of this makes my head hurt. Despite having taken a very helpful Money and Banking Course last year I don't have a really nuanced feel for the effects of changes in currency values, commodity values, etc. I would probably have to be a trader to get that kind of understanding. (Plus my head was already hurting from the flu.)

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on
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In story: Weekend Over OT

The right of dogs to bear arms
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TPM
Police in northern Wyoming say a rifle discharged after a dog apparently stepped on it, injuring a 46-year-old man.

Johnson County Sheriff Steve Kozisek says the bullet struck Richard L. Fipps, of Sheridan, in the arm on Monday.

by gk (gk) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
Well, we had been having a competitive devaluation of currencies. PBut the oil collapse has likely changed that. Any currency that belongs to a country with chronic trade deficits is under downward pressure. And the US$ is still the de facto world reserve currency, so the USA has simply been able to create dollars and use them to pay foreign debts, which only exacerbates that situation, as it creates an ever increasing supply of dollars to accompany and ever increasing cumulative trade deficit.

But skewed wealth distribution and austerity have combined to create demand destruction by decreasing effective demand. This is creating the foundation for deflation and depression. Now, with commodity prices falling broadly producers have less revenue  with which to service existing debt. See Irving Fisher's The Debt Defalation Theory of Great Depressions It is a 40 page PDF and well worth a read.

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on
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In story: 18 December 2014

Re: Nixon goes to China
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Transcript
President Nixon: "Say that I ... I ... I'd tell him I have doubts about it, but I think that it's, uh, now let me ask you, now you give me your judgment. You know I'm not too keen on any of these damn medical programs."

Ehrlichman: "This, uh, let me, let me tell you how I am ..."

President Nixon: [Unclear.]

Ehrlichman: "This ... this is a ..."

President Nixon: "I don't [unclear] ..."

Ehrlichman: "... private enterprise one."

President Nixon: "Well, that appeals to me."

Ehrlichman: "Edgar Kaiser is running his Permanente deal for profit. And the reason that he can ... the reason he can do it ... I had Edgar Kaiser come in ... talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because ...

by gk (gk) on
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In story: Weekend Over OT

Re: Outsourced
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We did consider that, but capital requirements is one insurmountable obstacle, another is a rather weak bargaining position vs. the railway (for our job we need the cooperation of several branches of the company, including ones under the same manager who is getting rid of us). Also note that if we continue in whatever form, we can't transfer and will have to re-acquire that international certification.

For now I agree with my boss that we should first wait and see what specific employment offer that Ltd. boss will make towards us. He has no men with the expertise of any of our remaining team (he can't use our equipment or analyse data or write reports to customers without us), so we are not entirely powerless to make demands (like no major wage cuts). Add to that that there would be one definite positive change: this guy is willing to approve significant investment and see a return in as long as two years (of course financed by his overcharging of the state company who wouldn't invest in us directly, but whatever). But who knows, he may still opt to kick us out of his room if we don't accept a 50% wage cut.

by DoDo on
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In story: 18 December 2014

Re: Nixon goes to China
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There is a major difference between reducing healthcare and reducing healthcare costs

by Cyrille (cyrillev domain yahoo.fr) on
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In story: Weekend Over OT

Re: Outsourced
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Sorry to hear this.

No chance of spinning it of as a workers owned company? You seem to have customers outside (since you reached break-even without paid intra-company work) and expertise they will have to pay for down the line. Well maybe capital requirements prevents it, just wanted to throw it out there.

by A swedish kind of death on
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In story: 19 December 2014

Re: Economy and Finance
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Because hyperinflation worked out so well after it was last tried on a European superpower.
by ThatBritGuy (thatbritguy (at) googlemail.com) on
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In story: 18 December 2014

Re: Nixon goes to China
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Depends on under what context he said it. Almost every healthcare reform is designed to 'limit' the cost of health care. Obamacare is no exception while trying to widen access.
by epochepoque on
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Cuba move comes as Russia tries to revive ties to Havana

President Obama's surprise economic and diplomatic opening to Cuba Wednesday comes at a time when Vladimir Putin's Russia has been trying to revive Moscow's once-close ties to the Castro regime, a longtime ally of the Soviet Union during the Cold War [...]

Mr. Putin visited Cuba as part of a tour of Latin America over the summer and is forgiving 90 percent of Cuba's Soviet Union-era debt, a total of more than $35 billion. Though the ties between the two countries were strained by the collapse of the Soviet Union, Cuba was one of the few supporters of Russia in its recent push into the Crimean Peninsula of Ukraine [...]

Mr. Putin can't be thrilled with the announcement of warming U.S.-Cuban ties, said Robert Jervis, a professor of international politics at Columbia University.

"I wonder, did Castro tell Putin ahead of time?" Mr. Jervis said. "If he didn't, and I were Russia I'd be more than a little annoyed."

by das monde on
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Comment from a long historical and legal analysis linked to in the above (rather confused) article:

EU Law Analysis: The CJEU and the EU's accession to the ECHR: a clear and present danger to human rights protection

As for those of us who support human rights protection, today's judgment is an unmitigated disaster. For the most part, human rights advocates have supported EU accession to the ECHR for many years, in order to ensure effective external control of the failings of the EU and (within the scope of EU law) its Member States as regards human rights. But today's CJEU judgment has surgically removed that key reason for supporting accession.
 
Far from enhancing the protection of human rights within the EU legal order, the EU's accession to the ECHR, on the terms which the CJEU insists upon, would significantly diminish it, for the EU would be compelled to ensure that it insulates itself against many human rights claims that might be brought against it.
 
So for the sake of those who are trafficked by EU-coordinated troops, who are suffering miscarriages of justice in EAW proceedings, who are being pushed back from the EU's shores, drinking from toilets in immigration prisons, starving on the streets because Member States won't or can't give them housing or benefits, or drowning in a desperate attempt to reach European refuge, we now have a moral duty to reject the EU's accession to the ECHR.
by afew (afew(a in a circle)eurotrib_dot_com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
Yuan & rouble are perhaps not optimal for discarding petrodollar. Financial perceptions are not in their control, as we see. There could be nothing better than gold for the serious job.

I smell a strategic long-term (or epochal) game here. The apparent supremacy of short term hardships must be just a noise, a convenient myth. The short-term squeeze of Russia might indicate a serious weakness of the West. The question is: What is the "epochal" game about? Is the civilization progress so weak that a new feudal order is in the cards? Does peak oil promise nothing but abandonment of the social-technological progress, combatant competition for survival and dominance? Russia holds then an ace with its resources - if only it can keep them. Capping the world economy with $12 trillion would be too strict, but not by terribly much given the stakes. The lay population is less than pawns, either in Russia, China or (since 2008 surely) the West.

by das monde on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
das monde:
Not so long ago, British scientists have successfully come to the same conclusion, as was published in the Conclusion of the U.S. Geological survey a few years ago.

This is the kind of apparently serious reference - that is in fact empty slush - that makes me take "Gold Eagle" with a pinch of gold dust. ;)

by afew (afew(a in a circle)eurotrib_dot_com) on
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Aren't they supposed to ask the Americans what their long term strategy is?

by Helen (lareinagal at yahoo dot co dot uk) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
The Rouble is currently devaluing as well as the US$.
With respect to what is US$ devaluing?
by das monde on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
The real issue is trade balances. On a gold standard gold only flows from one country to another when there is a persistent trade imbalance. The Rouble is currently devaluing as well as the US$. The price of any currency can be and is affected by market forces all the time. The ease with which this is done has a lot to do with the economic weight of any particular currency - the amount of transactions denominated in that currency. At $1000/oz all the gold in the world, which I have seen estimated at 12 billion ounces, would be worth only $12 trillion. That is less than the annual US GDP. while the net value of all US assets has been estimated at $50 trillion.

What all that means makes my head hurt. :-)

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
I really don't see why China and Russia have to trade in gold. I recall that they worked out a currency deal to settle in roubles and yuan. Unless US manipulation of the dollar price of gold, assuming it occurs, (I do), has no impact on the rouble and yuan price of gold, referencing gold would just seem to complicate matters and open up a fresh can of worms.

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on
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In story: Oil Prices Drop as Market Collapses

Re: Oil Prices Drop as Market Collapses
( / )
There were reports that Russia has been buying a lot of gold this year, and now it is expected to sell much of it. Is Putin trapped into an infavourable transaction (of selling cheaper), or is it other is around?

Grandmaster Putin's Golden Trap | Gold Eagle

No matter how strange it may seem, but right now, Putin is selling Russian oil and gas only for physical gold.

Putin is not shouting about it all over the world. And of course, he still accepts US dollars as an intermediate means of payment. But he immediately exchanges all these dollars obtained from the sale of oil and gas for physical gold!

[...] In the third quarter of this year, Russia had purchased an incredible amount of gold in the amount of 55 tons. It's more than all the central banks of all countries of the world combined (according to official data) [...]

Not so long ago, British scientists have successfully come to the same conclusion, as was published in the Conclusion of the U.S. Geological survey a few years ago. Namely: Europe will not be able to survive without energy supply from Russia. Translated from English to any other language in the world it means: "The world will not be able to survive if oil and gas from Russia is subtracted from the global balance of energy supply".

[...] in exchange for Russian oil, gas and uranium, the West pays Russia with dollars, purchasing power of which is artificially inflated against oil and gold by the efforts (manipulations) of the West.  However,  Putin uses these dollars only to withdraw physical gold from the West in exchange at a price denominated in US dollars, artificially lowered by the same West [...]

Especially interesting in this context looks the November statement of the first Deputy Chairman of Central Bank of Russia Ksenia Yudaeva, which stressed that the CBR can use the gold from its reserves to pay for imports, if need be. It is obvious that in terms of sanctions by the Western world, this statement is addressed to the BRICS countries, and first of all China. For China, Russia's willingness to pay for goods with Western gold is very convenient.

[...]  the solitaire of Russian-Chinese relations is extremely successful for Moscow and Beijing. Russia buys goods from China directly for gold at its current price. While China buys Russian energy resources for gold at its current price. At this Russian-Chinese festival of life there is a place for everything: Chinese goods, Russian energy resources, and gold - as a means of mutual payment. Only the US dollar has no place at this festival of life. And this is not surprising. Because the US dollar is not a Chinese product, nor a Russian energy resource. It is only an intermediate financial instrument of settlement - and an unnecessary intermediary. [...]

Traditionally, the West has used two methods to eliminate the threat to the hegemony of petrodollar model in the world and the consequent excessive privileges for the West:

One of these methods - colored revolutions. The second method, which is usually applied by the West, if the first fails - military aggression and bombing.

But in Russia's case both of these methods are either impossible or unacceptable for the West.

by das monde on
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In story: 17 December 2014

Re: Living On The Planet
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Islamic State Penal Code Promises Crucifixion, Lashing for Unbelievers | Washington Free Beacon
The Islamic State (IS) has published it own penal code, which harshly penalizes actions such as sodomy and blasphemy with punishments including execution, crucifixion, lashing, and the severing of limbs, among other penalties.
by das monde on
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In story: Weekend Over OT

Re: Outsourced
( / )
Wealth creators in action, alas. Blessed is their hard work and risk taking.

I was working on a positive attitude the last weeks :-]

by das monde on
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Two must-read background articles (the second from a treasured colleague who used to work with us at our business school):
Cuba Central.
Cuban Re-Mix.

by maracatu on
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This was yesterday (more than 24 hours ago).

by maracatu on
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In story: 18 December 2014

Re: People and Klatsch
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Sandwich, Inc. - The Baffler

With this third problem, we arrive at the curious intersection between neoliberal economics, wage stagnation, and anti-immigration sentiment in Europe. The industrialization of the modern diet, which brings what appears to be widespread social benefits in the form of cheap calories, creates a proletarianized workforce, many of whom themselves will be consumers of cheap industrialized food. But a proletarianized workforce is also vulnerable to pressures from workers in poorer countries who are already even more proletarianized, and hence more eager to work for low wages in poor conditions.

One thing more: because the Hungarians arriving in the UK will not be earning enough to actually live on, and are European Union citizens, they will be eligible for a variety of government benefits, including subsidies for housing. In other words, even when the workers are imported from abroad, the British government will subsidize multi-national corporations--first by granting job creation tax relief and second by providing economic assistance to their hapless low-wage workers.

The vicious cycle begins with good intentions: the welfare state intervenes to create jobs and subsidize workers. But those good intentions intersect with corporate greed (Greencore took in $2 billion last year), the industrialization of everyday life, the proletarianization of the global workforce, and Europe's relatively open borders. The borders are open for many reasons, most of which are admirable; but one of them is the EU's ruling neoliberal economic doctrine, which openly requires a "flexible" workforce-that is, one composed of proletarians who are willing to leave their families and friends, cross the border, and labor in a refrigerator, if that's where the money is.



by melo (melometa4(at)gmail.com) on
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News and Views

 19 December 2014

by In Wales - Dec 18, 44 comments

Your take on today's news media

 18 December 2014

by dvx - Dec 17, 56 comments

Your take on today's news media

 New Weekend OT

by afew - Dec 19,

Getting seriously solsticy

 Weekend Over OT

by afew - Dec 16, 21 comments

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