{"id":28005,"date":"2014-11-29T08:54:07","date_gmt":"2014-11-29T16:54:07","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=28005"},"modified":"2014-11-29T09:12:03","modified_gmt":"2014-11-29T17:12:03","slug":"black-coffee-oil-and-dr-copper-reveal-a-world-economy-in-distress","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id28005-black-coffee-oil-and-dr-copper-reveal-a-world-economy-in-distress.html","title":{"rendered":"Black Coffee: Oil and Dr. Copper Reveal a World Economy in Distress"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe<\/em> …<\/p>\n

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.<\/p>\n

I hope everybody had a terrific turkey day on Thursday. I know I did! Due to the holiday, I have an espresso edition of Black Coffee for you this week. We’ll go back to the more traditional mug next week.<\/p>\n

Here we go …<\/p>\n

Credits and Debits<\/strong><\/p>\n

Debit:<\/strong><\/span> The US economy is doing so well, one in five American households celebrated Thanksgiving on food stamps<\/a> this year. That’s absolutely tragic — and yet the mainstream media rarely, if ever, questions how this can be if the US economy is doing as well as the government advertises<\/a>.<\/p>\n

Debit:<\/strong><\/span> I’ve got to hand it to Janet Yellen and the US government’s plunge protection team<\/a>; they’re doing one heck of a job<\/a>. How else can you reasonably explain US stock market indices continuing to sit at or near all-time highs<\/a> — despite falling commodity prices, diving interest rates, and a contracting world economy?<\/p>\n

Credit:<\/strong><\/span> For example, this week the price of oil dipped to its lowest level in more than five years<\/a> — and 40% cheaper than it was in June. It’s also the reason why the average price of gasoline in the US is now just $2.79<\/a>.<\/p>\n

Credit:<\/strong><\/span> In fact, the US pump price for regular unleaded has fallen for more than 60 consecutive days<\/a>. Even my local corner gas station in Southern California dropped the price under $3.00 earlier this week. Hooray!<\/p>\n

Credit:<\/strong><\/span> Despite the declining prices, OPEC announced that it would not curtail oil production<\/a>. And that has some forecasters now predicting that gasoline prices will drop an additional 25 cents<\/a> by Christmas.<\/p>\n

Credit<\/strong>:<\/span> Then again, before you get too giddy, keep in mind that those falling oil prices are also shining a light on the true economic picture, as Raul Ilargi Meijer puts it<\/a>:“Without the multilayered veil of propaganda, spin, fixed data, bailouts and handouts for the banking system.” <\/em>Unfortunately, it’s a shambles.
\n<\/em><\/p>\n

Debit:<\/strong><\/span> Without significantly higher oil prices, some analysts insist that the shale oil industry can’t compete<\/a> with traditional producers. If true, that threatens to undermine the recent US oil production boom. It also portends trouble for oil shale investors. Uh oh.<\/p>\n

Debit:<\/strong><\/span> By the way, it’s not just oil prices that are collapsing. Copper, which is usually a very reliable leading indicator of economic health, is at a four-year low<\/a> too.<\/p>\n

Credit<\/strong>:<\/span> Is “Dr. Copper<\/a>” — along with crude oil — signalling financial headwinds on the horizon that are even worse than the ones we’re currently experiencing? I believe they are — and they’re as loud and clear as an air raid siren. At least for those who are willing to pay attention.<\/p>\n

Debit:<\/strong><\/span> That’s not to say that the fiscal shenanigans that have been going on since 2009 to keep the markets artificially propped up won’t continue; they will — until they can’t. The hard part is knowing whether that fateful day is still weeks, months or years away. But I’m betting sooner rather than later.<\/p>\n

The Question of the Week<\/strong><\/p>\n

[poll id=\"36\"]<\/code><\/p>\n

Last Week’s Poll Results<\/strong><\/p>\n

What did you have for Thanksgiving dinner this year?<\/p>\n