As Goes Canada …, China Warns ‘Fed’ (Again!), Mexican Oil Exports, and Some Geopolitical Thoughts
The Economy – As Goes Canada?: As goes Canada’s consumer so goes America’s consumer? Energy Bulletin’s (energybulletin.net) 5/24/09 post “Former CIBC chief economist Jeff Rubin: Peace-nik” by Jeff Sanford, Canadian Business, might lead us to that conclusion. Here are some of the highlights of that post:
- The article references Jeff Rubin’s new book Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization
and some of Mr. Rubin’s views such as, “The Chimerica trade route that rapidly expanded in the ‘80’s and ‘90’s flooded North America with cheaply produced Asian goods. That helped the middle-class lifestyles through an era of stagnant wages, and in many ways became the backbone of North America’s economy. But the whole enterprise really works well only when crude is priced at US$25 a barrel. Now that oil is about to move into a new and permanently higher price range, as a result of shortages and a shift to less-efficient production, the lines of trade are about to break down. That is going to throw the Canadian economy first into a crisis and then, after a period of adjustment, into a post-carbon future. - Rubin predicts the consumer paradise Canadians have known over the past several years is about to break down …
- Another round of triple-digit oil prices, Rubin warns, will see a relocalization of manufacturing to Hamilton from Guangdong. Western access to cheap Asian labor will decline as energy prices rise — AND THAT’S GOING TO INCREASE THE PRICE OF BASIC GOODS, LIKE FOOD, BY AS MUCH AS 40% (caps ours).
- Also in Rubin’s crystal ball: $7-a-gallon gasoline in the United States, along with a crash in the greenback that will make driving so expensive that many poorer American’s will realize that they can no longer afford it. One-fifth of all cars on the road will be gone in a decade.”
Note: In case you might be thinking that Jeff Rubin is some off-the-wall nut: he was interviewed on Fox Business News (cable) this AM for his views.
China Warns ‘Fed’ (Again!): Telegraph.co.uk on 5/25/09 posted this Ambrose Evans-Pritchard piece; “China warns Federal Reserve over ‘printing money.’”
- In the article: “Richard Fisher; President of the Dallas Federal Reserve Bank said: Senior officials of the Chinese government grilled me about whether or not we are going to monetize the actions of our legislature.” “… I was asked at every single meeting about our purchases of Treasuries.”
- “… Mr. Fisher, … has been running a fervent campaign to alert Americans to the “very big hole” in unfunded pension and health-care liabilities built up by a careless political class over the years.”
- “His warning comes amid growing fears that America could loose its AAA sovereign rating.”
Mexican Oil Exports: “Mexican oil exports plummet’ is the title of the 5/24/09 Energy Bulletin post (energybulletin.net) per Upstream.
- “Mexican oil exports plunged 18.2% in April to levels unseen since 1990 outside hurricane seasons, in more grim news for a key economic motor relied on for a major chunk of government revenues.”
- “… Mexico is a top three oil supplier to the United States but production has declined steadily since 2004 as the country struggles to replace capacity lost at Cantarell.”
Until next time; keep your eyes on the horizon as the weathers changing fast.
wow.