Category Archives: Commodities

Has the Shale Bubble Already Burst?

Just like the famous Gold Rushes of the 19th century, US shale gas development is turning out to be a limited and regional market opportunity. Across the Atlantic, the high financial and human costs to fracking also mean that Europe should forget any fantasies about repeating the US shale boom.

Many US shale companies that have been beating the drums of shale “revolution” are now facing oil and gas well depletion. In February 2013 the US Energy Information Administration (EIA) warned that “diminishing returns to scale and the depletion of high productivity sweet spots are expected to eventually slow the rate of growth in tight oil production”. It was a cautious but intriguing statement.

Obama’s Own Party Wages War on Energy Plans

Yves here. Since I watch energy and environment stories only from time to time, I’m not certain of the significance of pushback by some in the Democratic party against Obama’s deliberately mislabeled “clean energy” plans, which translate roughly as “all fracking all the time”. Is it that Obama is moving a tad early into lame duck status? Is it that Democratic party Congresscritters learned from 2010, in which the Blue Dog Democrats who were aligned with Obama took big losses, and the bona fide progressives did well?

Iran Gets Creative Over Energy Payments from Turkey and Pakistan

Yves here. Although this post is nominally about how Iran is currently working around America’s and the EU’s sanctions, it points out that for the US to tighten the noose further would likely undermine some of America’s other geopolitical aims.

How Goldman Cost $5 Billion Manipulating Aluminum Inventories (and Copper is Up Next)

What sexual favors were exchanged so that the New York Times blunted the impact of an important, detailed investigative story on Goldman profiteering, this time in the aluminum market, by releasing it on a heat-addled summer Saturday?

Is an Oil Shock Brewing?

The oil price jumped to an eighteen month high last night. Can we expect this trend to continue?

China’s Most Famous Ghost City Busts

The Chinese government, as has been widely reported, is trying to cool growth, in large measure to take the hot air out of its shadow banking sector. But can it engineer its hoped-for soft landing?

Gaius Publius: Obama’s New Climate Plan: Less Coal, More Fracking

There’s speculation on whether we are being prepped for a Yes to Keystone.

Me? I think we’re being set up for a Yes, but I’ve thought that since the subject came up. If the baby keeps grabbing for the candy, you have to conclude s/he wants it. Same with this.

South Africans Plan to Protest Obama’s Crimes Against Africa During Presidential Visit

An Obama tour of Africa is likely to provide a marker of he is perceived in the rest of the world, although any negative reports are unlikely to get much play in our lapdog media. But since Obama was shunned in the recent G-8 conference, it’s going to be interesting to see how his African hosts muster up the appearance of enthusiasm during his visit.

Wolf Richter: One Part Of Japan’s Abenomics Salvation Is Already A Fail

Japan’s attack in the Currency War was supposed to make it more competitive in international trade – but that, it failed to do. In fact, the opposite occurred.

Extreme Energy, Extreme Implications: Interview with Michael Klare

If oil and gas is a profoundly dynamic phenomenon, then so too must be environmental risk and conflicts over natural resources—and we are not getting the full picture from the mainstream media, according to Michael T. Klare, professor of peace and world security studies at Hampshire College, TomDispatch blogger, and author of Rising Powers, Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books, 2008). As risk multiply, conventional sources evaporate and we are left with “extreme” energy, renewables may be the only way to avoid war and disaster.

Sasha Breger: More Ways That Financiers Suck Wealth From Agricultural Providers (and Ultimately, You)

By Sasha Breger, a lecturer at the Josef Korbel School of International Studies at the University of Denver and author of the recent book Derivatives and Development. Her research includes global finance, derivatives, social policy, food, and farming. Cross posted from Triple Crisis

In my last two posts (http://triplecrisis.com/a-great-sucking-sound-part-2/, http://triplecrisis.com/a-great-sucking-sound-part-1/), I addressed the roles of debt, farmland acquisition, and physical commodity hoarding in helping finance siphon wealth from global agriculture. In this final post, I discuss the role of derivatives and insurance markets in this redistributive process.

Sasha Breger: How Commodities Hoarding Distorts Food Prices

Despite financial firms’ pious claims to the contrary, their commodities machinations extract wealth from agricultural providers, and thus also ultimately from consumers.

Sasha Breger: How Big Finance is Eating the World’s Lunch Agricultural Wealth

If you hear a kind of whooshing, rushing noise, don’t worry—it’s not US jobs moving to China. Today’s great sucking sound is the sound of agricultural wealth being siphoned off into the global financial system.

Richard Alford: The “Dutch Disease” and Once and Future Economic Crises in the US

By Richard Alford, a former New York Fed economist. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side.

The term Dutch Disease refers to negative macro-economic effects on a country of a boom in commodity exports or other developments that result in large capital inflows. It may be that the Dutch Disease contributed to the recent US recession and that the prospective energy-led US economic recovery could amount to nothing more than another bout of the Dutch Disease.

The Case for 4% Inflation

Yves here. Some readers are likely to recoil at the idea that more inflation might be a good thing. But the flip side is that economists are still fighting the war of the 1970s.