Get your Wife an Oil Rig
BALTIMORE – What do you get your wife for her birthday? Here’s a suggestion for the woman who has everything: Get her an oil rig. The daily rental rate was about $500,000 in 2014. Now, you can get it for half off.
The faithful gather for an audience with the rig god. Nowadays you can rent him real cheap.
Photo via likesuccess.com
And the price could go lower. When the industry was flush and foolish, drillers put in their orders for new rigs. Those rigs are still being delivered, even though the number of idle rigs is now the highest in history.
Unfortunately, many of the companies that ordered the rigs borrowed the money to pay for them. That’s what you do when it looks like the sky is the limit. Then, when the sky falls on your head, you don’t have any way to pay your loans. Borrowers default. If enough loans go bad… lenders go broke, too.
Yes, a few borrowers and lenders going to go broke – that much is already certain. This is the effective yield on the Merrill CCC and below index, which contains the lowest rated junk debt. There’s quite a bit of energy debt in it these days. Note how far it has increased above the late 2011 spike induced by the euro area debt crisis – click to enlarge.
But we’re not going to worry about it today. We’ve got other things to worry about. Big things. At least, that’s what the chief economics commentator at the Financial Times, Martin Wolf, tells us.
He says our great republic is in danger of being hijacked by a “narcissistic bully.” You know who he’s talking about. And he says that if Donald Trump wins the White House, it “would be a global disaster.”
How does he know that? Would it be less of a global disaster if Marco Rubio, Ted Cruz, or Hillary Clinton were elected?
Fortunately, Mr. Wolf is wrong about everything. And when he quotes Robert Kagan, a war-mongering Washington insider and Deep State mouthpiece, telling us that Trump is the “GOP’s Frankenstein monster,” we begin to feel a warm affection arising for The Donald.
We are stoics, here at the Diary. Yes, the people may vote in a monster (what choice do they have?). Yes, Trump may be a global disaster. But at least the voters will get what they deserve. And if it is Mr. Trump who gets the crown, we have no real reason to think he will be a more benighted and misbegotten ruler than any of the others.
Globalist establishment mouthpiece and etatiste Martin Wolf – if you were unsure whether Donald Trump deserved support, you have just been given a strong reason to reconsider in his favor. As a matter of principle, one should believe and do the exact opposite of what Wolf thinks and recommends…it is the only safe course. Trump in the White House a “global disaster”? Hardly, considering his competition.
Photo credit: Carnegie Council for Ethics in International Affairs
Besides, the election process is an exercise in solemn deceit. The U.S. government is among the oldest in the world. It works, on paper, more or less as it was meant to do. But in practice, it is as far away from the federal government of 1789 as downtown Los Angeles is from the little Mexican village on that spot 200 years ago.
For one, government has become a much bigger business. As it added to its own wealth and power, smart people discovered how to use it to get wealth and power for themselves. Lobbyists, insiders, and the elite figured out how to get special treatment – privileges, favors, tax breaks, contracts, sinecures.
The Pentagon got weapons it didn’t even want. The corn states produced ethanol consumers didn’t want or need. And the Deep State – a permanent government of bureaucrats, think tanks, cronies, special interests, zombies, and politicians that nobody wants – made elections merely gestures of mass mythology.
We are supposed to believe our vote can change the course of an election… and that our candidate can change the course of history. Like most myths, it can’t be disproven. But the odds of it are extremely remote; rye whiskey will accumulate in rain barrels first.
The Deep State decides important matters, not elections. It decides who gets what, for example. And its new money system – put in place by President Nixon in 1971 – makes it possible to shift money to idlers and chiselers, without even a token vote in Congress.
A rentier is someone who gets his money without providing anything in return. The game is rigged in his favor. He uses the power of the government to enforce an unfair deal.
The old rentiers of the 17th and 18th centuries held title to land – which probably dated from some ancient conquest. They “earned” their living by renting that land to tenant farmers.
The new rentier rents money. He gets it for next to nothing. And he rents it out at market rates. The system is so subtle… so clever… and so complex that even today not one person in 1,000 understands what is going on.
The common folk know something is wrong. But they don’t know what. So, they turn to Trump, who promises to “kick ass”… or to Bernie Sanders, who promises to tax and spend on their behalf.
He promises to kick ass and take names… and this year the Republican base, which rightly feels spurned by the party establishment, clearly prefers this promise to “more of the same”.
Photo credit: Scott Audette / Reuters
Do Sanders or Trump have any clue as to what is really going on? Probably not. Have they already made peace with the Deep State? Probably. As for Rubio and Clinton, they were the Deep State candidates from the get-go – both promising more intervention… more wars… more programs… more this, more that…all of it to further the interests of the Deep State and its clients.
Next time… we bring this series to a spectacular close.
Chart by St. Louis Fed
Chart and image captions by PT
The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.
You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.
Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke
One Response to “Donald Trump Haters are Missing the Point”
Most read in the last 20 days:
- India: The World’s Fastest Growing Large Economy?
Popular Narrative India has been the world’s favorite country for the last three years. It is believed to have superseded China as the world’s fastest growing large economy. India is expected to grow at 7.5%. Compare that to the mere 6.3% growth that China has “fallen” to. India's quarterly annualized GDP growth rate since 2008, according to MOSPI (statistics ministry) - click to enlarge. The IMF, the World Bank, and the international media have celebrated...
- Gold Sector Update – What Stance is Appropriate?
The Technical Picture - a Comparison of Antecedents We wanted to post an update to our late December post on the gold sector for some time now (see “Gold – Ready to Spring Another Surprise?” for the details). Perhaps it was a good thing that some time has passed, as the current juncture seems particularly interesting. We received quite a few mails from friends and readers recently, expressing concern about the inability of gold stocks to lead, or even confirm strength in gold of...
- Don’t Blame Trump When the World Ends
Alien Economics There was, indeed, a time when clear thinking and lucid communication via the written word were held in high regard. As far as we can tell, this wonderful epoch concluded in 1936. Everything since has been tortured with varying degrees of gobbledygook. One should probably not be overly surprised that the abominable statist rag Time Magazine is fulsomely praising Keynes' nigh unreadable tome. We too suspect that this book has actually lowered the planet-wide IQ –...
- What is the Best Time to Buy Stocks?
Chasing Entry Points Something similar to the following has probably happened to you at some point: you want to buy a stock on a certain day and in order to time your entry, you start watching how it trades. Alas, the price rises and rises, and your patience begins to wear thin. Shouldn't a correction set in soon and provide you with a more favorable buying opportunity? Apple-Spotting – a five minute intraday chart showing the action in AAPL on February 1, 2017 - an...
- Incrementum Advisory Board Meeting, Q1 2017 and Some Additional Reflections
Looming Currency and Liquidity Problems The quarterly meeting of the Incrementum Advisory Board was held on January 11, approximately one month ago. A download link to a PDF document containing the full transcript including charts an be found at the end of this post. As always, a broad range of topics was discussed; although some time has passed since the meeting, all these issues remain relevant. Our comments below are taking developments that have taken place since then into...
- Trump and the Draining of the Swamp
Swamp Critters BALTIMORE – The Dow is back above the 20,000-point mark. Federal debt, as officially tallied, is up to nearly $20 trillion. The two go together, egging each other on. The Dow is up 20 times since 1980. So is the U.S. national debt. Debt feeds the stock market and the swamp. What’s not up so much is real output, as measured by GDP. It’s up only 6.4 times over the same period. Debt and asset prices have been rising three times as fast as GDP for 36 years! Best...
- Gold and Silver Divergence – Precious Metals Supply and Demand
Gold and Silver Divergence – Precious Metals Supply and Demand Last week, the prices of the metals went up, with the gold price rising every day and the silver price stalling out after rising 42 cents on Tuesday. The gold-silver ratio went up a bit this week, an unusual occurrence when prices are rising. Everyone knows that the price of silver is supposed to outperform — the way Pavlov’s Dogs know that food comes after the bell. Speculators usually make it...
- Making America Great Again – How to Judge Policy
A Simple Formula MIAMI – How do we know if new programs will make the economy better... or worse? Here’s a simple formula: W = rv (w-w – w-l) That is, wealth is equal to the real value of win-win exchanges minus the loss from win-lose exchanges. Yes, dear reader, it’s as simple as that. Like a whittler working on a piece of wood, we’ve shaved so much off, there is nothing left of it... except the essential heartwood. When devising a win-win,...
- When Trumponomics Meets Abenomics
Thirty Year Retread What will President Trump and Japanese Prime Minister Shinzo Abe talk about when they meet later today? Will they gab about what fishing holes the big belly bass are biting at? Will they share insider secrets on what watering holes are serving up the stiffest drinks? [ed. note: when we edited this article for Acting Man, the meeting was already underway] Japan's prime minister Shinzo Abe, a dyed-in-the-wool Keynesian and militarist, meets America's...
- The Great Wailing
Regret and Suffering BALTIMORE – Victoribus spolia... So far, the most satisfying thing about the Trump win has been the howls and whines coming from the establishment. Each appointment – some good, some bad from our perspective – has brought forth such heavy lamentations. Oh no! Alaric the Visigoth is here! Hide the women and children! And don't forget the vestal virgins, if you can find any... You’d think Washington had been invaded by Goths, now...
- Receive a One Percent Gift When Buying or Selling a Home
How to Save Money When Buying or Make More When Selling a Home In your professional capacity and perhaps also in your private life, you may be closely involved with financial and commodity markets. Trading in stocks, bonds or futures is part of your daily routine. Occasionally you probably have to deal with real estate as well though – if you e.g. want to purchase an apartment or a house, or if own a home you wish to sell. The people who took this photograph probably want to...
- Silver Futures Market Assistance – Precious Metals Supply and Demand
Silver Is Pushed Up Again This week, the prices of the metals moved up on Monday. Then the gold price went sideways for the rest of the week, but the silver price jumped on Friday. Taking off for real or not? Photo credit: NASA Is this the rocket ship to $50? Will Trump’s stimulus plan push up the price of silver? Or just push silver speculators to push up the price, at their own expense, again? This will again be a brief Report this week, as we are busy...