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.

 

rig godThe 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.

 

CCC junkYes, 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.

 

Global Disaster

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.

 

wolfGlobalist 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

 

Sham Elections

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.

 

crony-socialismThis seems a good time to unwrap this instructive illustration of modern-day crony socialism again – click to enlarge.

 

Unfair Deal

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.

 

trumpsterHe 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.

 

 
 

 
 

Dear Readers!

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”

  • Kafka:

    Dear Bill:

    If Trump has “made peace” with the Deep State, why are they setting their hair on fire and running around like chickens with their heads cut off ?

    By the way, the picture is an oil jack/pump not a rig.

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • The Biggest Stock Market Crashes Tend to Happen in October
      October is the Most Dangerous Month The prospect of steep market declines worries investors – and the month of October has a particularly bad reputation in this respect.   Bad juju month: Statistically, October is actually not the worst month on average – but it is home to several of history's most memorable crashes, including the largest ever one-day decline on Wall Street. A few things worth noting about 1987: 1. the crash did not presage a recession. 2. its...
  • Fed Quack Treatments are Causing the Stagnation
      Bleeding the Patient to Health There’s something alluring about cure-alls and quick fixes. Who doesn’t want a magic panacea to make every illness or discomfort disappear? Such a yearning once compelled the best and the brightest minds to believe the impossible for over two thousand years.   Instantaneous relief! No matter what your affliction is, snake oil cures them all. [PT]   For example, from antiquity until the late-19th century, bloodletting was used to...
  • Canada: Risks of a Parliamentary Democracy
      A Vulnerable System Parliamentary democracy is vulnerable to the extremely dangerous possibility that someone with very little voter support can rise to the top layer of government. All one apparently has to do is to be enough of a populist to get elected by ghetto dwellers.   Economist and philosopher Hans-Hermann Hoppe dissects democracy in his book Democracy, the God that Failed, which shines a light on the system's grave deficiencies with respect to guarding liberty. As...
  • Federal Reserve President Kashkari’s Masterful Distractions
      The True Believer How is it that seemingly intelligent people, of apparent sound mind and rational thought, can stray so far off the beam?  How come there are certain professions that reward their practitioners for their failures? The central banking and monetary policy vocation rings the bell on both accounts.  Today we offer a brief case study in this regard.   Minneapolis Fed president Neel Kashkari attacking a block of wood with great zeal. [PT] Photo credit: Linda Davidson...
  • Thoughtful Disagreement with Ted Butler
      Too Big to Fail?   Dear Mr. Butler, in your article of 2 October, entitled Thoughtful Disagreement, you say:   “Someone will come up with the thoughtful disagreement that makes the body of my premise invalid or the price of silver will validate the premise by exploding.”   Ted Butler – we first became aware of Mr. Butler in 1998, and as far as we know, he has been making the bullish case for silver ever since. Back in the late 90s this was actually a...
  • Donald Trump: Warmonger-in-Chief
      Cryptic Pronouncements If a world conflagration, God forbid, should break out during the Trump Administration, its genesis will not be too hard to discover: the thin-skinned, immature, shallow, doofus who currently resides in the Oval Office!   The commander-in-chief - a potential source of radiation?   This past week, the Donald has continued his bellicose talk with both veiled and explicit threats against purported American adversaries throughout the world.  In...
  • Precious Metals Supply and Demand Report
      Fat-Boy Waves The prices of the metals dropped $17 and $0.35, and the gold-silver ratio rose to 77.  A look at the chart of either metal shows that a downtrend in prices (i.e. uptrend in the dollar) that began in mid-April reversed in mid-July. Then the prices began rising (i.e. dollar began falling). But that move ended September 8.   Stars of the most popular global market sitcoms, widely suspected of being “gold wave-makers”. From left to right: Auntie Janet...
  • The Donald Can’t Stop It
      Divine Powers The Dow’s march onward and upward toward 30,000 continues without a pause.  New all-time highs are notched practically every day.  Despite Thursday’s 31-point pullback, the Dow is up over 15.5 percent year-to-date.  What a remarkable time to be alive.   The DJIA keeps surging... but it is running on fumes (US money supply growth is disappearing rapidly). The president loves this and has decided to “own” the market by gushing about its record run. During...
  • 1987, 1997, 2007... Just How Crash-Prone are Years Ending in 7?
      Bad Reputation Years ending in 7, such as the current year 2017, have a bad reputation among stock market participants. Large price declines tend to occur quite frequently in these years.   Sliding down the steep slope of the cursed year. [PT]   Just think of 1987, the year in which the largest one-day decline in the US stock market in history took place:  the Dow Jones Industrial Average plunged by 22.61 percent in a single trading day. Or recall the year 2007,...
  • Stocks Up and Yields Down – Precious Metals Supply & Demand
      Where the Good Things Go Many gold bugs make an implicit assumption. Gold is good, therefore it will go up. This is tempting but wrong (ignoring that gold does not go anywhere, it’s the dollar that goes down). One error is in thinking that now you have discovered a truth, everyone else will see it quickly. And there is a subtler error. The error is to think good things must go up. Sometimes they do, but why?   Since putting in a secular low at the turn of the millennium,...
  • The 2017 Incrementum Gold Chart Book
      A Big Reference Chart Collection Our friends at Incrementum have created a special treat for gold aficionados, based on the 2017 “In Gold We Trust Report”. Not everybody has the time to read a 160 page report, even if it would be quite worthwhile to do so. As we always mention when it is published, it is a highly useful reference work, even if one doesn't get around to reading all of it (and selective reading is always possible, aided by the table of contents at the...
  • Precious Metals Supply and Demand
      Fundamental Developments The prices of the metals shot up last week, by $28 and $0.57.   Heavy metals became pricier last week, but we should point out that the stocks of gold and silver miners barely responded to this rally in the metals, which very often (not always, but a very large percentage of the time) is a sign that the rally is unlikely to continue or hold in the short term. [PT]   Last week, we said:   “One way to think of these moves is...

Support Acting Man

Top10BestPro
j9TJzzN

Austrian Theory and Investment

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com