I'm Right Again Dot Com
A new commentary every Wednesday — February 10, 2016
A KNOW-NOTHING'S VIEW OF THE WORLD ECONOMY: Cheaper Oil
Note that I said, "cheaper," and not cheap. I am not the least bit anxious when the Arab princes fret over the high price of good racing camels as the price of petroleum plunges through recent record support levels. The Arabs brought this on themselves by jerking the rest of the world around on a short chain for years. We Americans have been the principal jerkees—willing to risk the flower of our youth and empty our treasury to insure the Arabs' well-being every time they squabble over who should have inherited the cloak of their prophet seven hundred years ago.
Part of the oil glut is due to it being the principal support of Putin's expanding empire, the resurgence of oil fields in Iraq and the lifting of restraints on Iranian oil—not to mention the rapid expansion of oil shale technology on this continent.
Things are not as good as they were in the oil patches everywhere on the planet, especially those new ones in the frackerland boom towns in North Dakota and the Russian oil fields, but cheap energy is a boon to the worldwide economy; to the producer of most everything on the fruited plain and to every means of transporting it. Expansion of the economy, spell that J-O-B-S, is inevitable.
The ultimate good news about this windfall for each one of us is touched upon in a statement issued by Ethan Harris, co-head of research at Bank of America. "The United States is still a net consumer of foreign oil. We import five million more barrels of oil a day than we export." He estimates that we American vehicle owners' now have, at least for a while, an extra $10-billion in our pockets each month that was being sucked out of our accounts by those greedy credit card machines installed on every gas pump.
Let's go spend it! Have we ever done otherwise?
-Phil Richardson, Observer of the human condition and storyteller. "He goes doddering on into his old age, making a public nuisance of himself." - Joseph L. Menchen
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