An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Well Bill writes in his forex thing at the link down-thread:
"By the time the extra supply is available, demand may have subsided and the excess supply drives down prices and so the cycle goes."
But we can see here from the EIA data that demand has NOT subsided as US firms are ordering at record real levels... so there goes his whole theory...
Neil comments over there:
"Only a little bit of the value of primary resource exports gets injected into the source country – via paying the staff and suppliers of the extractors. The rest is essentially rent."
Which is exactly right...
So their Western Canadian Select (heavy) is down at 15 USD/bbl and being exported to US at record rates... it trades at a steep discount to WTI or Bakken so maybe it was 85USD when WTI was 100USD (have to check) ... so if they keep filling orders at 15 USD going forward that means AT LEAST 70 USD in the previous price was pure 100% unadulterated RENT....
So if we are lamenting about Canada's "growth" rate going down via the NIA framework, then we are lamenting that Canadian rentiers are not leeching off as much as before...
(I'm positive Bill is not part of any "neo-liberal conspiracy!")
Previously, US consumers were paying Canadian rentiers for no productive contribution now they are not so I look at this as a step forward for US consumers as leading US fiscal withdrawals are going to stay the same and that steady leading USD income is going to be diverted to consume products and services that provide productive contribution and less rent...
The exchange rate has adjusted to reflect the composite quantitative measure of this rent removal.... when one nation is able to extract YUGE amounts of rent, ie unproductive contribution, from another this is indicative of HIGHER terms of trade, when the rent is removed, then it LOWERS the composite terms of trade, else equal yada yada...
Mike that would be like in osmosis, when you would observe water moving across a regulating membrane after the molality was increased on the one side your explanation would be "that's because water is becoming easier to get on the one side..."
As we export our own crude. Fucking ridiculous.
ReplyDeleteIt all depends, Mike, on who "owns" the natural resources of this country.
ReplyDeleteDo citizens own this nation, or did citizens "sell" it to a relatively few individuals, families and corporations?
The details of those sales agreements would be very interesting to review.
I refer the honourable gentlemen to the lyrics of the song by Green Day.
ReplyDelete"Don't want to be an American idiot.
One nation controlled by the media."
:)
Well Bill writes in his forex thing at the link down-thread:
ReplyDelete"By the time the extra supply is available, demand may have subsided and the excess supply drives down prices and so the cycle goes."
But we can see here from the EIA data that demand has NOT subsided as US firms are ordering at record real levels... so there goes his whole theory...
Neil comments over there:
"Only a little bit of the value of primary resource exports gets injected into the source country – via paying the staff and suppliers of the extractors. The rest is essentially rent."
Which is exactly right...
So their Western Canadian Select (heavy) is down at 15 USD/bbl and being exported to US at record rates... it trades at a steep discount to WTI or Bakken so maybe it was 85USD when WTI was 100USD (have to check) ... so if they keep filling orders at 15 USD going forward that means AT LEAST 70 USD in the previous price was pure 100% unadulterated RENT....
So if we are lamenting about Canada's "growth" rate going down via the NIA framework, then we are lamenting that Canadian rentiers are not leeching off as much as before...
(I'm positive Bill is not part of any "neo-liberal conspiracy!")
Previously, US consumers were paying Canadian rentiers for no productive contribution now they are not so I look at this as a step forward for US consumers as leading US fiscal withdrawals are going to stay the same and that steady leading USD income is going to be diverted to consume products and services that provide productive contribution and less rent...
The exchange rate has adjusted to reflect the composite quantitative measure of this rent removal.... when one nation is able to extract YUGE amounts of rent, ie unproductive contribution, from another this is indicative of HIGHER terms of trade, when the rent is removed, then it LOWERS the composite terms of trade, else equal yada yada...
Oh, I thought it was all about making the currency "harder" or, "easier" to get. ;)
ReplyDeleteMike that would be like in osmosis, when you would observe water moving across a regulating membrane after the molality was increased on the one side your explanation would be "that's because water is becoming easier to get on the one side..."
ReplyDelete