Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Deficit

Oil: How Much Lower?

This article appeared online at TheNewAmerican.com on Thursday, November 19, 2015:  

Cover of "The Black Swan: The Impact of t...

Cover via Amazon

Speaking at the Irish economics forum Kilkenomics last weekend, former successful derivatives trader, professor of Risk Engineering at New York University, and author of The Black Swan, Nassim Taleb said he thinks the price of a barrel of oil could go as low as $4 a barrel. This could be the result of a

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World Oil Glut Swells to 3 Billion Barrels, Driving Prices Down Further

This article appeared online at TheNewAmerican.com on Monday, November 16, 2015:  

Friday’s November report from the International Energy Agency (IEA) confounded so-called experts who have repeatedly predicted a bottom in oil prices. After West Texas Intermediate (WTI) briefly dropped below $40 a barrel in August, bulls were delighted to see prices for crude bounce up over $50 and stay there — right up until October.

The IEA report tried to corral all the complexities of the oil market into its two-page report:

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Saudi Arabia is Losing Its Bet

This article was published by The McAlvany Intelligence Advisor on Friday, October 23, 2015:  

A month after OPEC decided in November, 2014 to keep pumping oil, columnist Nathan Vardi, writing in Forbes, said that “Saudi Arabia is making a massive $750 billion bet in 2015 that the oil kingdom can endure lower oil prices longer than other oil producing countries … including [the US].”

It now turns out that the bet was much larger, and it’s going against OPEC. According to Bloomberg, Saudi Arabia is being forced to delay paying its government contractors as those lower oil prices, which declined faster and more sharply and are staying down longer than expected, are pushing the country further into deficit. This is on top of the

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Lower Oil Prices Pinching OPEC

This article appeared online at TheNewAmerican.com on Thursday, October 22, 2015:  

According to the International Energy Agency (IEA), the slowing in the demand for crude oil worldwide, coupled with more-than-abundant supply, bodes ill for higher prices for oil for at least the next year, if not longer. This is bad news for OPEC countries that need much higher oil prices to stay solvent.

The IEA predicted in its report last week that

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Federal Deficit at Eight-year Low; Don’t Celebrate Yet

This article appeared online at TheNewAmerican.com on Friday, October 16, 2015:  

On Thursday the Treasury Department announced that the federal deficit for the 2015 fiscal year, which ended September 30, fell to an eight-year low — $439 billion — thanks to tax revenues that grew at a rate faster than government spending. Revenues, according to the department, grew by eight percent over last year while government spending grew by five percent.

Treasury Secretary Jacob Lew celebrated:

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Oil Price Rebound Not Likely to Last, Says the IEA

This article was published by The McAlvany Intelligence Advisor on Wednesday, October 14, 2015: 

Since early August the price of crude has jumped almost 20 percent, moving some, including those in OPEC’s cartel, to conclude that its strategy is working: Flood the market to force prices so low that marginal producers, especially in the United States, will go out of business. With the resultant decrease in supply, prices will rebound, hopefully to levels where the cartel’s countries can continue to fund their welfare/warfare states.

Said the cartel last week:

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OPEC’s Strategy Appears to be Working: U.S. Layoffs Slowing Oil Production

This article appeared online at TheNewAmerican.com on Tuesday, October 13, 2015:  

On the surface, OPEC’s gamble appears to be paying off. As the oil cartel continues to pump at near maximum capacity, American energy producers are stacking rigs and laying off workers.

According to the U.S. Energy Information Administration (EIA), there were an estimated 700,000 workers involved in oil and gas development and production prior to the decline in oil prices. Since then, some 200,000 of those jobs no longer exist, rig count is down to record lows, and, if the EIA is correct, U.S. oil output next year will decline for the first time in eight years.

OPEC itself has estimated that

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The Ripple Effect of Rising Interest Rates

This article appeared online at TheNewAmerican.com on Wednesday, September 9, 2015:  

With financial talking heads now convinced that the Federal Reserve will finally increase interest rates as a result of the record-setting job openings report, few are asking about the “ripple effect” those increases might mean for individuals, for the auto and the housing industry, for companies and corporations, and, most importantly, for the debt-laden federal government.

If and when the fed announces upcoming interest-rate increases, in the short run, individuals might be tempted to accelerate their buying decision on cars and houses to take advantage of low rates before increases start flowing through to lenders in those sectors. In the longer run,

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Hyperinflation Imminent in Venezuela From Socialist Reforms

This article appeared online at TheNewAmerican.com on Friday, September 4, 2015:  

Estimates that price inflation in Venezuela is running between 10 and 20 percent a month are too low if one looks at the black market there. By putting price controls on essentials such as personal care items and medicines, President Nicolas Madura (pictured), a protégé of Marxist Hugo Chávez, Venezuela’s previous president, has guaranteed at least two things: shortages and rationing. A healthy but very expensive black market has sprung up to meet consumer needs for items such as chickens, medicines, and toilet paper.

In that black, or free, market, Venezuelan women were shocked to find that the price of tampons and other sanitary supplies jumped

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Saudi Arabia’s Cash Reserves Dwindling, Forcing It to Borrow

This article appeared online at TheNewAmerican.com on Friday, August 7, 2015:  

English: Saudi Arabia

In an astonishing admission that the Saudis have gambled with a bet that is now going sour, the Saudi Arabia Monetary Agency (the country’s central bank) reported:

It is becoming apparent that non-OPEC producers [in the United States] are not as responsive to low oil prices as had been thought, at least in the short run.

The main impact has been [for U.S. producers] to cut back on developmental drilling of new oil wells, rather than slowing the flow of oil from existing wells.

This [strategy to break U.S. producers] requires more patience.

But patience will last only as long as their foreign reserves of cash, and Saudi Arabia’s reserves (immense though they be) are dwindling rapidly. They peaked at $737 billion in August of 2014. In May of this year, they were down to

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Greek Vote the Death Knell for the EU?

This article was published by The McAlvany Intelligence Advisor on Wednesday, July 8, 2015:  

English: Nigel Farage at Lord's cricket ground...

Nigel Farage

Nigel Farage, named “Briton of the Year” in 2014 by the London Times, has finally found his voice. He noisily departed the Conservative Party in 1992 after the signing of the treaty that created the European Union to start his own UK Independence Party (UKIP). His criticism of the EU has been steady ever since, culminating in his eulogy on Monday: “The European Union is Dying Before our Eyes.”

According to Farage, Sunday’s referendum in Greece sealed its death warrant, even if somehow the Greek PM Alexis Tsipras is able to come to terms with the troika and have them turn on the financial spigot once again: “It [was] a crushing defeat for those Eurocrats who believe that you can simply bulldoze public opinion.” He added,

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Greece-EU Standoff Increases Chances of “Grexit”

This article appeared online at TheNewAmerican.com on Tuesday, July 7, 2015:  

UK Independence Party

Writing in London’s Telegraph on Monday, Nigel Farage, the leader of the anti-EU, pro-sovereignty UK Independence Party (UKIP), called Sunday’s referendum in Greece “a crushing defeat for those Eurocrats who believe that you can simply bulldoze public opinion.” Threats by those Eurocrats to shut off emergency financing unless the country agreed to its terms fell on deaf ears, especially among those under age 35: Eighty percent of them voted no on Sunday.

That cohort is the one least likely to remember the songs that were sung by those promoting the European Union decades ago:

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Is Puerto Rico America’s Greece?

This article appeared online at TheNewAmerican.com on Monday, July 6, 2015: 

After running deficits every year since 1973 and paying for them by borrowing, the U.S. commonwealth of Puerto Rico has finally run out of options. On June 28, the island’s Governor Garcia Padilla admitted that its $73 billion “debt is not payable.… We will [shortly] be in a death spiral.” Padilla added: “There is no other option. I would love to have an easier option. This is not politics, this is math.”

The math is persuasive.

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CBO Issues Ambiguous Report on Impacts of Repealing ObamaCare

This article first appeared online at TheNewAmerican.com on Monday, June 22, 2015: 

On Friday the Congressional Budget Office, the nonpartisan government agency that is tasked with predicting economic and budgetary impacts of various government programs, issued its analysis of what would happen if ObamaCare (the misnamed Affordable Care Act) were repealed. Its first questionable assumption was that it would be totally repealed effective January 1, 2016.

Its ambiguous, halting, and heavily discounted conclusions served as fodder for the statist media such as CNBC and NBC to warn of huge deficit increases if the socialized medical care program were repealed. NBC headlined a disaster ahead:

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U.S. Financial Outlook has “Worsened Dramatically”

This article first appeared online at TheNewAmerican.com on Wednesday, June 17, 2015: 


This graph is outdated but revealing


In its just-released report “The 2015 Long-Term Budget Outlook,” the Congressional Budget Office stated bluntly:

The long-term outlook for the federal budget has worsened dramatically over the past several years, in the wake of the 2007-2009 recession and slow recovery…. If current law remained generally unchanged in the future … growing budget deficits … would push [the national] debt above its current high level.

It’s all about government spending that’s baked into the cake:

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Kansas Considers Tax Increases Just as Its Economy Revives

This article appeared online at TheNewAmerican.com on Friday, June 12, 2015:

English: Aerial view of Kansas City, Kansas, l...

Aerial view of Kansas City, Kansas, looking southwest. The Kansas River (right-center) joins the Missouri River (left). A small piece of Kansas City, Missouri is visible on the left of the Missouri River.


Kansas House members debated until midnight Thursday whether to raise sales and cigarette taxes in order to close the state’s budget deficit. The House had just resoundingly defeated a previous measure that would have raised those taxes even more, but the state is facing a deadline to balance its budget, required under its constitution.

There’s a roughly $400-million shortfall this year, which is estimated to increase for the next several years.

Left-wing pundits have had a field day taking Governor Sam Brownback to task for calling his massive tax cuts enacted in 2012 an “experiment,” a “shot of adrenalin,” and similar to Ronald Reagan’s experiment based on the Laffer Curve: Reducing tax rates will increase tax revenues as the economy grows.

Paul Rosenberg, senior editor of Random Lengths News, a tiny weekly newspaper operating out of Long Beach, California, is a good example. His paper describes itself as an “independent progressive newspaper” with a readership of 63,000 that “is proud of the support from the Harbor Area labor unions, who allow us exclusive distribution inside most of their union halls.”

Rosenberg managed to get a screed attacking Brownback published in the hard-left Salon magazine in which he describes the Kansas governor as

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More Keynesian Insanity: Negative Interest Rates

This article first appeared at The McAlvany Intelligence Advisor on Monday, May 4, 2015:

There’s a corollary to the insanity rule. It’s called the Keynesian Corollary: When something doesn’t work, do more of it. When history is written about the coming Second Great Recession, historians will likely note July 2012 as the turning point. That was when Mario Draghi, head of the European Central Bank (ECB) said during a panel discussion that the ECB “is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

Other historians might list that as one of the top ten “famous last words” ever issued by a human being. Since that moment bond yields across the world have dropped, and dropped, and dropped. On Thursday Jeremy Warner, the London Daily Telegraph’s assistant editor, announced that

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Chicagoans had to Choose Between Venal and Feckless for Mayor

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, April 8, 2015: 

In Tuesday’s mayoral runoff in Chicago, voters had only two choices: to vote for the venal Rahm Emanuel or the feckless Chuy Garcia. Four years ago Emanuel rode Barack Obama’s coattails to victory, winning in a walk with 55 percent of the vote. In February, Emanuel couldn’t squeeze out a majority, getting only 46 percent of the vote and forcing a runoff with a far-left progressive on the Cook County Board of Commissioners, Jesus “Chuy” Garcia.

With the help of an estimated 100 “friends of Rahm,” Emanuel buried Garcia, raising some $30 million for his campaign, eight times what Garcia was able to raise. On Monday Emanuel held an 18-point lead over Garcia.

Garcia was hoping for a miracle.

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Latest Jobs Report Deceptive; Jobs Exported Overseas

This article first appeared online at TheNewAmerican.com on Saturday, March 7, 2015:

English: A North American Free Trade Agreement...

North American Free Trade Agreement logo

The employment report from the Labor Department on Friday was hailed as more evidence that the worst from the Great Recession is now in the rear view mirror, and receding. The unemployment rate in February dropped to 5.5 percent, lower than economists were predicting, while job growth added nearly 300,000 jobs, pushing the streak of gains of 200,000-plus new jobs per month out to a full year, the longest such streak since 1995.

The news caused stocks to lose more than one percent of their value, as Wall Street expected the robust numbers to hasten the day when the Fed would increase interest rates, potentially slowing the sluggish economy even further. Investors needn’t worry: Friday’s report was a head-fake.

If the recovery were real,

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U.S. Government’s Interest Costs to Quadruple in 10 Years

This article first appeared online at TheNewAmerican.com on Thursday, February 5, 2015: 

On Tuesday, the Wall Street Journal reported that the federal government will be paying $800 billion annually just to service the interest on its massive debt by 2025, up from just over $200 billion currently. By 2021, those interest costs will equal what the government is projected to be spending on national defense, and on non-defense (so-called “discretionary” items), and will greatly exceed those two budget items just by 2025. The Journal also noted that “non-discretionary” items (so-called “mandatory” expenditures) will continue their inexorable march upward, from $2 trillion currently to more than $4 trillion by 2025.

Surprisingly, few eyebrows were raised over the announcement,

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.

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