PeakOil is You
Low oil price, high production equals peak oil? Pt. 3
Re: Low oil price, high production equals peak oil? Pt. 3
by kublikhan » Thu 16 Jun 2016, 18:27:10
$this->bbcode_second_pass_quote('Whatever', 'I') don't think that argument makes very much sense at all. Here is why. The GPP graph also shows that a similar decline occurred during the great recession in 2009. Was that decline also due to dollar appreciation? Was there no great recession?
There was a large appreciation of the dollar in 2009. But no, that was not the cause of the great recession. That year there was indeed a global recession in real terms as well. Real global GDP fell during 2009. But look at the other dates in the original article for shrinking GPP in nominal dollars: 1982, 1997, 1998, 2001. These are all years of dollar appreciation and yet real world GDP growth. Just like in 2015: strong dollar and real growing global GDP.$this->bbcode_second_pass_quote('Whatever', 'I')t makes no sense.
$this->bbcode_second_pass_quote('', '2')009 - The bad news for the U.S. never seems to end. But despite all the doom and gloom, the dollar has emerged as the currency of choice once again. Here's why.
Stocks are at their lowest levels in about 12 years. The economy shrunk by more than 6% in the fourth quarter. Companies are laying off people left and right. And oh yeah, the government has essentially nationalized Citigroup (C, Fortune 500) and AIG (AIG, Fortune 500). There's no denying that the U.S. economy is in tatters. But how about that dollar? Yup, despite the unrelenting stream of bad news about the economy and markets, the greenback has stood out as one of the top performing currencies this year. The dollar is up about 9% against the euro and 7% versus the Japanese yen so far in 2009. It's also edged slightly higher against the British pound. What gives?
Well, as strange as it may sound, investors may be betting that the U.S., which arguably led the rest of the world into the global recession, will also be the first to emerge from the downturn. "The U.S. was one of the first nations to respond to the weakness with aggressive monetary policy measures. So it could be one of the first countries out while Japan and Europe might be the last ones out."
Mind you, this does not mean a recovery is around the corner. Lien thinks the U.S. economy is likely to deteriorate further before things finally improve. Still, as bad as the U.S. economy is faring, it's much worse in other parts of the world. So the dollar is being viewed as a relative pocket of stability. Busch agreed that the dollar now seems to be the only safe haven among currencies. He pointed out that with interest rates at practically zero, investors are flocking to U.S. Treasurys.
In 2015 things were different. The global economy was growing. The fed started tightening for the first time in seven years. Yet most other central banks were still pursing loose policy options. This is a recipe for a strong dollar.
But even if we disregard all of this and only look at GDP in nominal dollars, that is already growing again. You can see this by looking at the same IMF data the author used. IE, if that graph was updated to reflect current data it would already be showing growth again. Not a continued decline.
$this->bbcode_second_pass_quote('Whatever', 'A')nd besides, even World GDP shows a significant slowdown of growth happening now. Is that due to dollar appreciation as well?
$this->bbcode_second_pass_quote('Whatever', 'T')here is no logic to the dollar appreciation argument.
$this->bbcode_second_pass_quote('Whatever', 'A')s the economic decline worsens, it will soon become undeniable that the world economy is in recession.
The oil barrel is half-full.
(just a friendly joke, BTW, no threat implied, okay?)
