![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
wank, wank, wank
Nov. 6th, 2007 10:48 am(I suppose I should come up with an "economics" tag or something...)
Swiped from here, a table used to make a point other than the one I'm discussing:
Note the interesting differences between transportable energy commodities and everything else. Sure, the CPI is a ... questionable number as now reported, and arguably has been since the mid-90s calculation revisions put together basically to reduce the growth rate of various key governmental debt obligations such as Social Security. But leaving that aside for a moment, that 3, 3, and 4 multipliers vs. 9 and 11 multipliers is substantial, and, I think, revealing. If you take the base commodity increases as inflation indicators (and use those to price real money), then energy still costs three times as much as it did seven or eight years ago.
(Natural gas is transportable, sorta. It's transportable with pipelines, within a continent. From a practical standpoint, it's not transportable over water much yet, as the LNG bottlenecks are massively restrictive, and that's significant enough - particularly when discussing in terms of US dollars - that I think the distinction remains critical.)
If, on the other hand, you take the dollar as an oil-backed currency (as I do), and take it further than I do (as in, only oil-backed, which I think has not been valid for some time) well, that says very nervous things about other commodity prices. As in, they have a lot of catching up to do. Man I hope not. We have enough problems already.
Oil hit $97/barrel today, by the way, so that table is arguably worse than it looks, but hopefully that's more bubble than data. While I think it's still cheaper than it's going to be, for the moment, that's high. Also, the US dollar smashed below the Can93c level, too, down just under 92.5c, and is in general having yet another bad day against the basket and against the Euro and such. But on the other hand, the CDX markets have kind of leveled off! Yay! Oh, except they mostly aren't trading for lack of bids, like last August, so, um, yeah.
As for the stock market, well, as much as I hate to throw any fodder to the gold bugs, from Minyanville's Kevin Depew, here's the S&P 500 normalised against gold:
I wrote him asking whether he'd be willing to run that again, this time against oil, but he didn't do it. I don't have a Bloomberg terminal, so I can't - I don't have all the daily historical data and such, sadly, or I could try to work it out in something lame like Excel. But one thing to remember is that gold's up 3x since 2000. Oil's up nearly ten times as of today. (See table above.) Where's that put the S&P 500 and your bull market? Not higher...
Swiped from here, a table used to make a point other than the one I'm discussing:
Note the interesting differences between transportable energy commodities and everything else. Sure, the CPI is a ... questionable number as now reported, and arguably has been since the mid-90s calculation revisions put together basically to reduce the growth rate of various key governmental debt obligations such as Social Security. But leaving that aside for a moment, that 3, 3, and 4 multipliers vs. 9 and 11 multipliers is substantial, and, I think, revealing. If you take the base commodity increases as inflation indicators (and use those to price real money), then energy still costs three times as much as it did seven or eight years ago.
(Natural gas is transportable, sorta. It's transportable with pipelines, within a continent. From a practical standpoint, it's not transportable over water much yet, as the LNG bottlenecks are massively restrictive, and that's significant enough - particularly when discussing in terms of US dollars - that I think the distinction remains critical.)
If, on the other hand, you take the dollar as an oil-backed currency (as I do), and take it further than I do (as in, only oil-backed, which I think has not been valid for some time) well, that says very nervous things about other commodity prices. As in, they have a lot of catching up to do. Man I hope not. We have enough problems already.
Oil hit $97/barrel today, by the way, so that table is arguably worse than it looks, but hopefully that's more bubble than data. While I think it's still cheaper than it's going to be, for the moment, that's high. Also, the US dollar smashed below the Can93c level, too, down just under 92.5c, and is in general having yet another bad day against the basket and against the Euro and such. But on the other hand, the CDX markets have kind of leveled off! Yay! Oh, except they mostly aren't trading for lack of bids, like last August, so, um, yeah.
As for the stock market, well, as much as I hate to throw any fodder to the gold bugs, from Minyanville's Kevin Depew, here's the S&P 500 normalised against gold:
I wrote him asking whether he'd be willing to run that again, this time against oil, but he didn't do it. I don't have a Bloomberg terminal, so I can't - I don't have all the daily historical data and such, sadly, or I could try to work it out in something lame like Excel. But one thing to remember is that gold's up 3x since 2000. Oil's up nearly ten times as of today. (See table above.) Where's that put the S&P 500 and your bull market? Not higher...
