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

Category Archives: Economics

U.S. Economy Remains Strong Despite Wall Street Nervousness

This article appeared online at TheNewAmerican.com on Tuesday, December 11, 2018:  

At bottom, Wall Street is a gigantic gambling casino where investors and money managers predict the future and then place their bets. Those trying to justify Wall Street’s present nervousness are coming up with next to nothing.

Big banks such as JPMorgan and Bank of America, try as hard as they might, can’t make a single case for a downturn in the U.S. economy next year. Bloomberg allowed them a thousand words to make their case, but they failed. “On balance,” said these worthies, “[we’ve] been finding that a 2019 downturn still isn’t likely — though it’s becoming slightly more so.”

First are initial unemployment claims,the precursor, it is said, of future weakness in job hiring. “Initial jobless claims,” explained these experts, “are heading slightly higher on a weekly basis of late … but they’ve been at extraordinarily low levels and their recent pop has been relatively small.”

Nothing here. Move along.

Other indices are auto sales,industrial production, and aggregate hours worked, according to Bank of America’s Michelle Mayer. She said that the bank’s “gauge based on [these indices] puts the chance [of a recession] at less than 10 percent over the nex tsix months.”

Keep moving.

Business sentiment measures are another early warning signal, according to JPMorgan’s seers, which they say “have softened recently.” But the Institute of Supply Management’s two economic indicators, manufacturing and services, both jumped higher last month. Nothing to see here either, but the bank’s analyst, Jesse Edgerton, will stay focused on what he calls “high-frequency data … for an up-to-date picture of [economic]activity.” And he’ll be sure to let everyone know as soon as something substantial shows up.

Moving on.

The most revered of all indicators is the Fed’s Survey of Professional Forecasters, according to the banks. And, they say, “they’re starting to sour on the economy’s prospects four quarters from now.” But, they added, “their pessimism might be too remote to mean much.”

Conclusion: After writing 1,000 words,the banks have come up with essentially nothing. As a hat-tip to reality, it ended its article with this from Deutsche Bank’s Torsten Slok, who wrote last Thursday that “the incoming data continues to be good. Where is this recession the market is so worried about?”

Precisely.

Holiday sales are expected to set records. OPEC’s piddling response to the threat of oversupply of crude in world markets continues to drop oil prices and the cost of gasoline, which translates for more than 200 million American drivers into a tax-free bonus just in time for Christmas. Oh yes, and real wages are increasing faster than they have in years, while price increases (“inflation,” according to the Fed) have moderated below two percent on an annual basis.

What is the Fed doing about raising interest rates to kill the non-existent inflation monster? It has raised interest rates eight times since 2015 and is likely to raise them again next week. But what about the future? Prognosticators have just changed their tunes:The Fed was expected to continue raising rates well into 2019, but now futures traders (those who bet real money and not just ink on Bloomberg’s website) are backing off. They are betting that the Fed might raise interest rates one more time next year (instead of the three to four times experts were predicting just a month ago), and some are putting large sums down on the bet that — ready? —the Fed will reduce interest rates by one notch next year instead.

With China cutting tariffs on American-made vehicles from 40 percent to 15 percent, some can see the day when trade between the two nations will actually increase because of those lower tariffs. Where is the recession forecast in that? How would stocks react to that? Investors sitting on the sidelines waiting for things on Wall Street to settle down won’t have to wait long. The U.S. economy is doing just fine, and Wall Street investors will shortly put the recent gyrations in their rear-view mirrors and begin making their bets on a healthy and robust economy continuing into the foreseeable future.

Stocks Lose Four Percent Last Week, Thanks to the Fed

This article appeared online at TheNewAmerican.com on Saturday, December 8, 2018: 

Wall Street’s selloff last week has been blamed on everything but the real thing. The major indices lost more than four percent, with the Dow off nearly 10 percent since its recent high in early October.

Pundits have been peering into every corner for the culprit(s) to blame for the ferocious decline: shrinking housing and auto sales, rising credit card debt delinquency rates, higher oil and gas prices, slowing of job growth and capital investment, the accusations leveled at Chinese companies trying to break into technology service providers here in the United States, the appearance of “yield curve inversions,” and so forth.

The appearance of so-called death crosses (the 50-day moving average falling below its 200-day moving average) in the major averages have no doubt triggered more volatility. Algorithms have driven trading by computers (program and high-frequency trading) to up to half of all stock trades on the New York Stock Exchange. This leaves money managers and individual investors behind, forcing them to the sidelines to wait for calmer times.

Who is the real culprit behind this volatility in stocks? The New American has been nearly alone in pointing to the actions of the Federal Reserve (see Related Articles below) as the prime driver, focusing on its determination to slow the economy by raising interest rates. For example, we quoted the insider bank Goldman Sachs in late November: “The FOMC [the Fed’s Federal Open Market Committee] will likely be reluctant to stop [raising interest rates] until it is confident that the unemployment rate is no longer on a downward trajectory.” At the time, we said, “The Fed is determined … to keep raising rates until the economy is so weak that unemployment starts to increase!”

There’s more to that story. Since September 2014, the Federal Reserve has been intentionally and deliberately shrinking the money supply — the capital that a capitalist system needs to thrive and prosper — from $4.15 trillion to $3.5 trillion as of November 21,2018. That’s a 15-percent shrinkage in the “oxygen supply” the capitalis tsystem needs. But it’s worse than that: Most of that shrinkage has taken place since last September. Since then the Fed has reduced the money supply (its “Adjusted Monetary Base” numbers are available from the St. Louis Fed’s website) from$4.0 trillion to $3.5 trillion, a reduction of 12.5 percent.

That money-supply shrinkage is now showing up in the various places pundits are looking to place the blame, i.e.,anything that affects the financial well-being of the economy. As interest rates rise and the money supply shrinks (the two most powerful tools the Fed is using to slow the economy), housing starts slow, car sales dwindle, credit card payments increase, profit margins decline, and capital expenditure projects are taken off the board as they are no longer profitable enough to be justified.

Add to this the toxic mix of mixed messaging from the White House over the China trade talks, the incipient arrival of the Mueller investigation’s findings into Trump’s alleged misdoings, the threats being ramped up against the president by the Democrats salivating over their power to investigate when they take control of the House in January, and one wonders that Wall Street has any buyers left at all.

What about the economy? Does the “yield curve inversion” signal a recession in the next six months or so? Not according to Joseph Haubrich, an economist and a consultant for the Federal Reserve Bank of Cleveland. In April 2006, Haubrich was tasked with answering the question,“Does the Yield Curve Signal Recession?” His answer:

Evidence since the early 1990s sugges tthat the relationship between the yield curve and [future economic] growth has shifted, if not disappeared….

Speculating on whether or not the yield curve is truly predicting a recession remains exactly that: speculation.

Evidence continues to pour in over the health and strength of the U.S. economy. The Institute for Supply Management’s latest reports from both the manufacturing and service sectors of the U.S.economy confirms that health and strength. The latest jobs report, coming in below expectations for the first time, shows remarkable strength considering the shrinking pool of capable and skilled workers so desperately needed in the increasingly technology-driven U.S. economy. Oil and gas prices will continue to trend lower worldwide thanks increasingly to U.S. production records being set almost on a daily basis, which are making the United States the world’s largest producer of crude and refined products.

It’s the Fed that stands athwart the economy’s startling growth trajectory.

Who’s to Blame for the Decline on Wall Street?

This article was published by The McAlvany Intelligence Advisor on Monday, December 10, 2018:  

Following a volatile week in the stock market, President Trump met with his advisors to see if his Twitter account had anything to do with it. It is hoped that Trump’s original diagnosis remains in play: It’s Jerome Powell, the head of the Fed and his Keynesian sycophants on the Federal Open Market Committee (and not Trump’s Twitter account), who thinks it’s time to slow down the Trump train.

Some have opined that that decision was made more than a year ago when the Fed started raising interest rates an inch (25 basis points) at a time. Others think it was September 2017 when the Fed began shrinking its Adjusted Monetary Base with a vengeance. According to the FRED chart provided by the St. Louis Federal Reserve Bank (see Sources below), on September 12, 2017 the AMB was $4.0 trillion. On November 21, 2018, it had shrunk to $3.5 trillion, a 12.5 percent decrease in the single most important ingredient a capitalist economy needs to survive and thrive: capital. In simpler terms, the Fed has been stepping on Trump’s economy’s oxygen hose for more than a year, and the results are just now showing up.

Pundits have been peering into every other conceivable corner for the culprit(s) to blame for the ferocious decline: shrinking housing and auto sales, rising credit card debt delinquency rates, rising oil and gas prices, slowing of job growth and capital investment, the accusations leveled at Chinese companies trying to break into technology service providers here in the U.S., the appearance of “yield curve inversions,” and so forth.

The appearance of so-called “death crosses” (the 50-day moving average falling below its 200-day moving average) in the major averages have no doubt triggered more volatility. Algorithms have driven trading by computers (program and high-frequency trading) to up to half of all stock trades on the New York Stock Exchange. This leaves money managers and individual investors behind, forcing them to the sidelines to wait for calmer times.



Who is the real culprit behind this volatility in stocks? The well-informed have been pointing to the actions of the Federal Reserve as the prime driver, focusing on its determination to slow the economy by raising interest rates. For example, the insider bank Goldman Sachs said in late November: “The FOMC [the Fed’s Federal Open Market Committee] will likely be reluctant to stop [raising interest rates] until it is confident that the unemployment rate is no longer on a downward trajectory….” In other words, the Fed is determined to keep on raising interest rates until the economy is so weak that unemployment starts to increase!

That oxygen starvation is now showing up in the various places pundits are looking to place the blame: anything that affects the financial wellbeing of the economy. As interest rates rise and money supply shrinks (the two most powerful tools the Fed is using to slow the economy), housing starts slow, car sales dwindle, credit card payments increase, profit margins decline, and capital expenditure projects are taken off the board as being no longer profitable enough to be justified.

Add to this the toxic blend of mixed messaging from the White House over the China trade talks, the incipient arrival of the Mueller investigation’s findings into Trump’s alleged misdoings, the threats being ramped up against the president by the Democrats salivating over their power to investigate when they take control of the House in January, and one wonders that Wall Street has any buyers left at all.

What about the economy? Does the “yield curve inversion” signal a recession in six months or so? Not according to Joseph Haubrich, an economist and a consultant to the Federal Reserve Bank of Cleveland. In April 2006 Haubrich was tasked with answering the question, “Does the Yield Curve Signal Recession?” His answer:

Evidence since the early 1990s suggests that the relationship between the yield curve and [future economic] growth has shifted, if not disappeared….

Speculating on whether or not the yield curve is truly predicting a recession remains exactly that: speculation.

Evidence continues to pour in regarding the health and strength of the U.S. economy. The latest reports from the Institute for Supply Management on both the manufacturing and services sectors of the U.S. economy confirm that health and strength. The latest jobs report, coming in below expectations for the first time, shows remarkable strength considering the shrinking pool of capable and skilled workers so desperately needed in the increasingly technology-driven U.S. economy. Oil and gas prices will continue to trend lower worldwide thanks increasingly to U.S. production records being set on an almost daily basis that are making the U.S. the world’s largest producer of crude and refined products.

It’s not your Twitter account that’s causing Wall Street to stumble, Mr. President, although there are times when you’re less than totally consistent in your using of it. It’s not the “natural end” of the nearly 10-year long bull market. Bull markets (and economic growth) don’t die of old age, they are murdered by the Fed. There is only one enabler that has the power to raise interest rates and shrink the money supply, Mr. President, and Powell and Friends are using both of these tools to stop your economy.

—————————-

Sources:

McAlvanyIntelligenceAdvisor.comWho gave Powell the Power to Manipulate Markets?

CNBC.comDow tumbles more than 500 points, wipes out gain for the year to cap wild week on Wall Street

Does the Yield Curve Signal Recession? By Joseph G. Haubrich, Federal Reserve Bank of Cleveland (2006)

Five year chart of the Adjusted Monetary Base

History of the Financial Crisis of 2007

MarketWatch.comA death cross for the S&P 500 highlights a stock market in tatters

Investopedia.comProgram trading 30 to 50 percent of daily NYSE volume

Background on Joseph Haubrich

United States Is Now World’s Largest Oil and Gas Producer

This article appeared online at TheNewAmerican.com on Friday, December 7, 2018:

The United States exported more crude oil than it imported last week, for the first time since 1943. The crossing over the threshold to energy independence was inevitable thanks to the fracking revolution and the fading influence of the OPEC cartel that has dictated world oil prices for 60 years. Michael Lynch, president of Strategic Energy & Economic Research, said, “We are becoming the dominant energy power in the world.”

Just last month, U.S. Interior Secretary Ryan Zinke announced that “we are the largest oil and gas producer on the face of the planet, rolling through 11 million [barrels of oil a day] … on our way to 14 [mbd].”

And, along the way, reducing OPEC’s influence. Seniors remember

Keep reading…

Tuesday’s Wall Street Selloff Triggered by Trump, Not the Economy

This article appeared online at TheNewAmerican.com on Wednesday, December 5, 2018: 

It was President Trump’s tweets that set Wall Street’s teeth on edge on Tuesday, with the popular averages losing more than three percent by the close of business. On Monday it was the president’s assurance not only that a “truce” had been declared in the tariff war between the United States and China, but that the Chinese had 90 days to come to terms with the president, or else.

The Dow gained 300 points on Monday over the perceived good news.

And then the president appeared to backtrack slightly on Tuesday, letting a lot of air out of Wall Street’s balloon:

Keep reading…

Who gave Powell the Power to Manipulate Markets?

This article was published by The McAlvany Intelligence Advisor on Friday, November 30, 2018: 

With just two words – “just below” – Fed Chair Jerome Powell gave Wall Street what it was hoping to hear on Wednesday: a step back from his “we’re a long way from neutral” comments in early October. Wall Street finished the day higher by more than two percent. Here’s what Powell said that triggered the relief rally:

Interest rates are still low by historical standards, and they remain just below [emphasis added] the broad range of estimates of the level that would be neutral for the economy – that is, neither speeding up nor slowing down growth.

That’s a very long way from his previous comments that took 2,500 points off the Dow in the weeks following their issuance.

Nearly all the conversation was about Powell’s words, which were, according to Robert Pavlik, chief investment officer at SlateStone Wealth, “exactly what the market was expecting to hear. Obviously it has to do with the market reaction to his previous comments. He had to walk [them] back.”

There was much discussion over just what he meant by “neutral.” Two weeks ago, Charles Evans, the president of the Chicago Federal Reserve Bank who also sits on the Fed’s Federal Open Market Committee, didn’t know what “neutral” meant:

Keep reading…

Two Words From the Fed, and Wall Street Jumps More Than Two Percent

This article appeared online at TheNewAmerican.com on Thursday, November 29, 2018: 

While Fed Chair Jerome Powell was addressing the Economic Club of New York on Wednesday, the stock market was open, and it was listening. What it was listening for exceeded its expectations and stocks jumped in the final hours of trading by more than two percent, its biggest one-day gain since the end of March.

What was “the street” listening for?

Keep reading…

Holiday Shoppers Ignore Conference Board’s Report, Set Records on Black Friday

This article was published by The McAlvany Intelligence Advisor on Monday, November 26, 2018:  

The report from the Conference Board last Wednesday was gloomy. Said the board’s Director of Economic Research, Ataman Ozyildirim:

The US LEI increased slightly in October, and the pace of improvement slowed for the first time since May. The index still points to robust economic growth in early 2019, but the rapid pace of growth may already have peaked.

 

While near term economic growth should remain strong, longer term growth is likely to moderate to about 2.5 percent by mid to late 2019.

On Black Friday, U.S. shoppers ignored the Conference Board and went on a shopping spree for the record books. Online shoppers spent more than $6 billion while overall sales totaled $23 billion. That’s almost 10 percent ahead of last year’s Black Friday results.

And it’s likely to get even better.

Keep reading…

Shoppers Set Records on Black Friday; Cyber Monday Records Likely As Well

This article appeared online at TheNewAmerican.com on Monday, November 26, 2018: 

The Conference Board released the results of its Leading Economic Index (LEI) from October on Wednesday, claiming that it reflected an economy that is beginning to slow. On Friday consumers ignored the report and went on a spending spree for the record books. Online shoppers spent more than $6 billion, while overall sales totaled $23 billion. That’s almost 10 percent ahead of last year at this time.

And it’s likely to get even better.

Keep reading…

OPEC Impotent, Thanks to Saudi-orchestrated Killing

This article appeared online at TheNewAmerican.com on Friday, November 23, 2018: 

Coming out of the emergency meeting by OPEC in Abu Dhabi over the November 10 weekend, Saudi Arabia’s Energy Minister Khalid al-Falih claimed that when the cartel meets officially on December 6 in Vienna, it will “do whatever it takes to balance the oil market.”

That was before evidence of Saudi Arabia’s involvement in the murder of journalist Jamal Khashoggi in early October surfaced. Now the Saudis are faced with trying to “balance” not only global oil market but also their now highly strained relationship with the United States.

President Trump had called on the Saudis to lower oil prices as world crude oil prices moved higher in advance of the sanctions coming on Iran in November. On October 3, the day after Khashoggi was assassinated, American oil prices hit $76 a barrel. When waivers were granted to Iran,

Keep reading…

Wall Street Worries? Blame the Fed

This article appeared online at TheNewAmerican.com on Wednesday, November 21, 2018: 

It was Jeremy Siegel, professor of finance at the Wharton School of Business and the seer who predicted that the Dow Jones Industrial Average would see 20,000 by the end of 2015, who got it right. The stock market’s recent fall, losing 1,000 points in two days earlier this week and almost 2,500 points since early October, was caused by Jerome Powell, the head of the Federal Reserve. During an interview on CNBC’s Closing Bell on Tuesday, Siegel said, “The market is saying that the pace [of the Fed’s interest rate hikes] is a little too fast.… The market is clearly worried about over-tightening [by] the Fed.”

The decline can be traced to remarks by Powell in early October that the Fed was

Keep reading…

Fed Official Suggests Four More Interest Rate Hikes in 2019

This article appeared online at TheNewAmerican.com on Monday, November 19, 2018:  

As far as one can tell, Charles Evans, the president of the Chicago Federal Reserve Bank who also sits on the Fed’s policymaking body the FOMC (Federal Open Market Committee), never in his life swung a hammer, put on a tool belt, or had to meet a payroll. But when it comes to interest rates and their impact on the housing market, he has an opinion: interest rates are too low and should go higher, perhaps much higher. And soon. He “penciled in” possibly four more interest rate hikes next year.

But he’s not really sure what that means.

Keep reading…

The U.S. Treasury Just Issued a “Buy” Signal for Hard Money Investors

This article was published by The McAlvany Intelligence Advisor on Friday, November 15, 2018:

This writer opined in this space [at The McAlvany Intelligence Advisor] on Wednesday that, due to certain technical and political indicators, this would be an opportune time for hard money advocates to open or add to their holdings of precious metals. That same day, the U.S. Treasury issued its own fundamental “buy” signal. In its monthly statement of receipts and outlays of the U.S. government, it noted that although receipts jumped more than seven percent in October, year-over-year, government spending rose a breathtaking 18 percent compared to October a year ago.

Buried in the various charts and graphs was this note:

Keep reading…

U.S. Government Ran $100 Billion Deficit in October

This article appeared online at TheNewAmerican.com on Thursday, November 15, 2018: 

The U.S. Treasury’s monthly statement of income and expenditures should have been a cause for celebration: Total receipts of $253 billion (a quarter of a trillion dollars) in October were 7.6 percent ahead of last October’s receipts. This is the expected result of lowering tax rates and removing onerous regulations so that the economy could breathe again.

But the celebration never happened.

Keep reading…

Latest NFIB Report Confirms Robust Health of U.S. Economy

This article appeared online at TheNewAmerican.com on Wednesday, November 14, 2018:  

Just when concerns over the future of the U.S. economy have reached fever pitch thanks to the recent volatility on Wall Street, along comes the National Federation of Independent Business (NFIB) to calm those concerns. Its October report, “Small Business Economic Trends”, was summed up thus:

Overall, small businesses continue to support the 3 percent plus growth of the economy and add significant numbers of new workers to the employment pool.

 

The percent of owners with one or more unfilled openings is at a 45 year record high level.

 

Employment is growing faster than the population (210,000 per month this year to date), so the gains in jobs are being “fueled” in part by increased labor force participation.

 

Consumer optimism is also running at near-record levels, supported by rising wages and plentiful job openings.

After reviewing the numbers in each category (from “plans to increase employment” to “earnings trends”), the authors of the study concluded: “Bottom line, the October report sets the stage for solid growth in the economy and in employment in the fourth quarter, while inflation and interest rates remain historically tame. Small businesses are moving the economy forward.”

Indeed they are. The NFIB boasts membership of 325,000 small business owners, reflective of the estimated 28 million small-to-medium-sized businesses in the United States with fewer than 500 employees. That’s compared to about 20,000 companies with 500 employees or more.

And they swing a big hammer.

Keep reading…

Another Opportunity to Purchase Gold and Silver?

This article was published by The McAlvany Intelligence Advisor on Wednesday, November 14, 2018:

With gold closing at $1,202 an ounce and silver closing below $14 an ounce on Tuesday, safe haven hard money investors have the third opportunity in three years to take advantage of such prices.

In November 2015, gold bottomed at $1,081 an ounce; in December 2016 it found support at $1,169 an ounce, and on Tuesday it dropped $1.50 from Monday’s close to finish at exactly $1,202.

Three separate studies have shown the connection between monetary uncertainty and the behavior of precious metals prices. The first, completed by Jonathan Batten, Cetin Ciner and Brian Lucey, concluded that

Keep reading…

Dow Loses 800 Points in Two Days — a Forecast of Weakening Economy?

This article appeared online at TheNewAmerican.com on Tuesday, November 13, 2018:

Monday’s selloff in stocks brought the Dow Jones Industrial Average (DJIA) down to 25,377, off more than five percent since early October. Other averages followed suit. Is this decline a harbinger of further declines to come and, more ominously, an end to the one of the strongest economic rebounds in U.S. history?

The president blames the Democrats. On Monday he tweeted that “the prospect of Presidential Harassment by the Dems is causing the Stock Market big headaches.”

Those headaches are likely to be substantial, as far-left House Democrats take over powerful seats in the new Congress. Whether they gain traction is another matter entirely. Featuring such far-left anti-Trumpers as Nancy Pelosi, Maxine Waters, and Elijah Cummings, Democratic efforts could backfire in the 2020 reelection campaigns. Without an apparent legislative agenda, the Democrats will rely on loud and noisy opposition to the president’s policies, which are likely to tire voters two years from now.

The president is already in “retaliation” mode, warning last Wednesday that Democrat subpoenas, harassment, and charges will create a “warlike” atmosphere and that he might do some investigating of them in return.

But are those threats the primary cause of Wall Street’s troubles?

Keep reading…

OPEC: Do “Whatever it Takes” to Balance Oil Market

This article appeared online at TheNewAmerican.com on Monday, November 12, 2018:

Following the emergency meeting attended over the weekend by members of the OPEC cartel and its non-members in Abu Dhabi, Saudi Arabia’s Energy Minister Khalid al-Falih said “We need to do whatever it takes to balance the oil market.” That goal is indicative of OPEC’s increasing nervousness that it is running out of options to counter increasing U.S. oil production. Last month, the EIA (Energy Information Administration) announced that the United States now leads the world in crude oil production, ahead of both Saudi Arabia and Russia.

For many years, the cartel was able to dictate oil policy and prices globally, bending the world oil markets to the cartel’s needs and purposes. Ten years ago,

Keep reading…

OPEC is in a Pickle, Thanks to U.S. Oil Producers

This article was published by The McAlvany Intelligence Advisor on Monday, November 12, 2018:  

In this space a week ago, this writer panned King Hubbard’s “Peak Oil” theory as fracking technology and favorable market conditions for U.S. producers continued to drive world crude oil prices lower. In early October, the price of oil for November delivery was over $76 a barrel. At the market close on Friday, November 2, the price for December delivery was below $63, pushing the oil market close to bear market territory.

The oil market continued its remarkable decline, with December oil futures trading at the close on Friday, November 9, below $60 a barrel.

This has gotten the attention of the oil ministers of OPEC and its hangers-on (like Russia and Oman), and on Saturday they held an emergency meeting in Abu Dhabi, UAE to see what could be done to stop the decline. On Sunday, Saudi Arabia’s oil minister told Oman’s oil minister that, come December, the cartel will cut oil production by a million barrels a day.

Everything was running along smoothly right up through August.

Keep reading…

U.S. Officially the World’s Largest Crude Oil Producer

This article appeared online at TheNewAmerican.com on Monday, November 5, 2018: 

In an interview with CNNMoney in June, Pioneer Natural Resources Chairman Scott Sheffield said he expected U.S. crude oil production to surpass 11 million barrels a day by this fall, making the United States the world’s top oil producer. Right on schedule the Energy Information Administration announced on Thursday that the U.S. oil industry produced 11.3 million barrels of crude oil a day during August, an increase of 416,000 barrels from the previous month and topping production from Saudi Arabia and Russia. That level of crude oil production is more than 2 million barrels a day ahead of August 2017, the largest increase over any 12-month period in U.S. history.

Sheffield told CNNMoney that “we’ll be at 13 [million] very quickly” and predicted that that number could jump to 15 million in a very few years.

On Wednesday U.S. Interior Secretary Ryan Zinke told Fox News that officially “today we are the largest oil and gas producer on the face of the planet, rolling through 11 million … on our way to 14.”

In less than 10 years, thanks largely to the development of, and continued improvement to, fracking technology, U.S. crude oil production has more than doubled, from 5 million bpd (barrels per day) in 2008 to more than 11 million today.

This has immediate as well as long-term ramifications that extend far beyond gas prices at the pump.

Keep reading…

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann