They still haven't figured out that nothing in life is "free"
The Idiocracy still hasn't figured out where 0% poverty capital comes from. It's a Faustian Bargain compliments of monetized poverty. Anyone who takes advantage of it gets monetized. "Shit happens, man"...
Today's clueless slumdog billunaires took their poverty monetization profits and invested them back into the output gap. Why? Because they're clueless dunces:
What better example than the oil industry where tycoon buffoons overinvested trillions in the sector at 0%, and then were baffled when demand never showed up:
Aug. 19, 2014:
T. Boone Pickens: "Brent crude will be above $100 forever"
July 9, 2015:
"I'm standing by my $70 end-of-year prediction"
Today:
"The problem with my $70 prediction [aka. 'October']"
The price of oil mirrors the poverty trap:
Instead of people working less when wages fall, they work more to make up "income" aka. wage x hours. Instead of oil producers pumping less oil when prices fall, they pump more, to make up "revenue" aka. price x quantity...
According to Econ 101, a fall in price is supposed to elicit a fall in supply. That's the opposite of what is happening now:
CNBC: Oct. 8, 2015
Oil's Dead Cat Bounce
"Global oil supply (production) is still growing"
"Gilman did not expect any supply response [reduction] from OPEC at the end of the year."
"Venezuela has repeatedly called for a cut in production [by everyone else] as its government struggles with lower oil revenues"
Dead cat bounce visualized:
Oil & Gas Journal: July 6, 2015
OPEC Price War Is Reminiscent of 1986 and 1998 (Circled):
$trillions have already been vapourized. Trillions more to come...
Fracking ETF:
Supply v.s. Supply
The bastardized term "supply" in oil parlance means daily production. It has nothing to do with the long-term state of oil reserves. Somehow supply has been construed in terms of how much oil is coming out of the ground versus how much is left in the ground...OPEC is trying to kill long-term "supply" aka. investment, by raising short-term supply. A process which takes years, not weeks or months. Eventually, OPEC's strategy will work, but oil could be a lot lower by the time that it does.
Getting back to wages, in a similar fashion, Econo-dunces will find out the hard way, that when every Econo-dunce is out of a job at the same time, wages collapse even as every dunce is clamoring for more hours. A race to the bottom.
aka. The poverty trap:
Why the economy is tanking in one graph:
Productivity versus wages has diverged since Globalization:
All thanks to the free lunch club aka. Generation Madoff
