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:
- Gold - Ready to Spring Another Surprise
Sentiment Extremes Below is an update of a number of interesting data points related to the gold market. Whether “interesting” will become “meaningful” remains to be seen, as most of gold's fundamental drivers aren't yet bullishly aligned. One must keep in mind though that gold is very sensitive with respect to anticipating future developments in market liquidity and the reaction these will elicit from central banks. Often this involves very long lead times. Blackbeard's...
- Modi’s Great Leap Forward
India’s Currency Ban – Part VIII India’s Prime Minister, Narendra Modi, announced on 8th November 2016 that Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes would no longer be legal tender. Linked are Part-I, Part-II, Part-III, Part-IV, Part-V, Part-VI and Part-VII, which provide updates on the demonetization saga and how Modi is acting as a catalyst to hasten the rapid degradation of India and what remains of its institutions. India’s Pride and Joy Indians are...
- Global Recession and Other Visions for 2017
Conjuring Up Visions Today’s a day for considering new hopes, new dreams, and new hallucinations. The New Year is here, after all. Now is the time to turn over a new leaf and start afresh. Naturally, 2017 will be the year you get exactly what’s coming to you. Both good and bad. But what else will happen? Image of a recently discarded vision... Image by Michael Del Mundo Here we begin by closing our eyes and slowing our breath. We let our mind...
- The Great El Monte Public Pension Swindle
Nowhere City California There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years. There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island. El Monte, California, is one of those places. Advice dispensed on Interstate...
- A Trade Deal Trump Cannot Improve
Worst in Class BALTIMORE – People can believe whatever they want. But sooner or later, real life intervenes. We just like to see the looks on their faces when it does. By that measure, 2017 may be our best year ever. Rarely have so many people believed so many impossible things. Alice laughed. "There's no use trying," she said: "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for...
- Pope Francis Now International Monetary Guru
Neo-Marxist Pope Francis Argues for Global Central Bank As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated. Neo-Papist transmogrification. We highly recommend the economic thought of one of Francis' storied predecessors, John Paul II, which we have written about on previous occasions. In “A Tale of Two Popes” and...
- Where’s the Outrage?
Blind to Crony Socialism Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous. The liberal press usually misrepresents this as a hypocritical “jobs for the boys” program within the capitalist class. In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid. Believe me. I’ve been on both sides of this kind of dispute (except, of course, for the “failed”...
- Trump’s Trade Catastrophe?
“Trade Cheaters” It is worse than “voodoo economics,” says former Treasury Secretary Larry Summers. It is the “economic equivalent of creationism.” Wait a minute - Larry Summers is wrong about almost everything. Could he be right about this? Larry Summers, the man who is usually wrong about almost everything. As we have always argued, the economy is much safer when he sleeps, so his tendency to fall asleep on all sorts of occasions should definitely be welcomed....
- Money Creation and the Boom-Bust Cycle
A Difference of Opinions In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard, the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote: I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud...
- Silver’s Got Fundamentals - Precious Metals Supply-Demand Report
Supply-Demand Fundamentals Improve Noticeably Last week was another short week, due to the New Year holiday. We look forward to getting back to our regularly scheduled market action. Photo via thedailycoin.org The prices of both metals moved up again this week. Something very noticeable is occurring in the supply and demand fundamentals. We will give an update on that, but first, here’s the graph of the metals’ prices. Prices of gold and silver...
- Trump’s Plan to Close the Trade Deficit with China
Rags to Riches Jack Ma is an amiable fellow. Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl. At a moment of peak inspiration, he executed his first search engine request by typing in the word beer. Jack Ma, founder and CEO of Alibaba, China's largest e-commerce firm. Once he was a school teacher, but it turned out that he had enormous entrepreneurial talent and that the world of wheelers, dealers, movers and...
- Side Notes, January 14 - Red Flags Over Goldman Sachs
Red Flags Over Goldman Sachs Just to prove that I am an even-handed insulter, here is a rant about my former employer, Goldman Sachs. The scandal at 1MDB, the Malaysian sovereign wealth fund from which it appears that billions were stolen by politicians all the way up to the Prime Minister, continues to unfold. The main players in the 1MDB scandal. Irony alert: apparently money siphoned off from 1MDB was used to inter alia finance Martin Scorcese's movie “The Wolf of...