4 ms·

We've been here before, set that graph to show the last 15 years. https://www.eurekalert.org/news-releases/879968 https://www.eurekalert.org/news-releases/87996

by pharke 5y ago

We've been here before, set that graph to show the last 15 years. https://www.eurekalert.org/news-releases/879968 https://www.eurekalert.org/news-releases/879968

time_to_smile 5y ago
If HN had a slogan today it would be "this is fine."
- sremani 5y ago
  Shale revolution saved US and indirectly rest of the world of many things. We had one heck of decade with cheap Natural Gas prices in the US and the market adjusted to that. The days of Cheap NG are over given that it is now the preferred input for electricity generation including the peaker plants. The next step is US banning NG and Oil exports which can happen before next presidential election. There are many reasons but the second and third order effects of 'plague' have to run through the system and it would take a decade for all these things to wash through. It is not a coincidence famine follows plague and war follows famine. The bush fires have already started if you are paying attention.
  - exhilaration 5y ago
    If anyone is curious, the US had a ban on natural gas and oil exports until 2015, when Republicans in Congress passed legislation to overturn the ban, which Obama then proceeded to sign: https://www.reuters.com/article/us-usa-fiscal-oil/congress-kills-u-s-oil-export-ban-boosts-solar-wind-power-idUSKBN0U121U20151219 https://www.reuters.com/article/us-usa-fiscal-oil/congress-k...
- djrogers 5y ago
  We've been here before isn't the same thing as 'this is fine'. The earth has had several extinction-level events in it's history - it wouldn't be 'fine' to have one again.
  - dev_tty01 5y ago
    Well, the earth would be fine. The earth would carry on without us and it wouldn't be long until there were no traces of our incredibly short term existence. I've always been amused by "Save the Earth" campaigns. The proper phrase is "Save the Humans."
phkahler 5y ago
I went back the full 30 years. Nice! so a spike in the price of pee is an indicator of financial crisis or instability.
adamc 5y ago
Do we have a theory for why it would be more than a chance correlation?
- nostrademons 5y ago
  High input prices cause inflation, inflation causes central banks to tighten monetary policy, tight monetary policy causes financial crashes as the cash flows of assets are evaluated against higher discount rates.
  - jyu 5y ago
    Real interest rates are still massively negative and will not change much if our total 2022 hikes are 1%. It seems like monetary policy will result in financial crashes (like you allude in that comment) or potentially even more inflation crashing certain assets upwards, or a slight possibility of hyperinflation. Curious what odds you assign for each outcome?
    - nostrademons 5y ago
      Personally I think the answer is "all of the above", at different timescales. Long-term, I'm betting that it'll end in hyperinflation. But on the short term, asset prices tend to track nominal interest rates better than real ones, because investors have a hard time correctly predicting the effect of inflation on an individual firm's cash flows. (We saw this in the 1970s, where P/Es compressed from about 20 to about 8 in response to higher interest rates, but company profits also rose with inflation, so when interest rates normalized in the 80s stock prices took off.) So if the Fed raises rates, asset prices could crash by 50% or more, which may trigger them to drop rates again, which further pumps inflation and raises stock prices, which causes another cycle of tightening, etc. Expect things to get messy, and less predictable than they were before. The long-term trend is toward a worthless U.S. dollar and infinite stock prices, but there could be a lot of ups and downs before then.

by pharke 5y ago

We've been here before, set that graph to show the last 15 years. https://www.eurekalert.org/news-releases/879968 https://www.eurekalert.org/news-releases/879968

time_to_smile 5y ago

If HN had a slogan today it would be "this is fine."

sremani 5y ago
Shale revolution saved US and indirectly rest of the world of many things. We had one heck of decade with cheap Natural Gas prices in the US and the market adjusted to that. The days of Cheap NG are over given that it is now the preferred input for electricity generation including the peaker plants. The next step is US banning NG and Oil exports which can happen before next presidential election. There are many reasons but the second and third order effects of 'plague' have to run through the system and it would take a decade for all these things to wash through. It is not a coincidence famine follows plague and war follows famine. The bush fires have already started if you are paying attention.
- exhilaration 5y ago
  If anyone is curious, the US had a ban on natural gas and oil exports until 2015, when Republicans in Congress passed legislation to overturn the ban, which Obama then proceeded to sign: https://www.reuters.com/article/us-usa-fiscal-oil/congress-kills-u-s-oil-export-ban-boosts-solar-wind-power-idUSKBN0U121U20151219 https://www.reuters.com/article/us-usa-fiscal-oil/congress-k...
djrogers 5y ago
We've been here before isn't the same thing as 'this is fine'. The earth has had several extinction-level events in it's history - it wouldn't be 'fine' to have one again.
- dev_tty01 5y ago
  Well, the earth would be fine. The earth would carry on without us and it wouldn't be long until there were no traces of our incredibly short term existence. I've always been amused by "Save the Earth" campaigns. The proper phrase is "Save the Humans."

phkahler 5y ago

I went back the full 30 years. Nice! so a spike in the price of pee is an indicator of financial crisis or instability.

adamc 5y ago

Do we have a theory for why it would be more than a chance correlation?

nostrademons 5y ago
High input prices cause inflation, inflation causes central banks to tighten monetary policy, tight monetary policy causes financial crashes as the cash flows of assets are evaluated against higher discount rates.
- jyu 5y ago
  Real interest rates are still massively negative and will not change much if our total 2022 hikes are 1%. It seems like monetary policy will result in financial crashes (like you allude in that comment) or potentially even more inflation crashing certain assets upwards, or a slight possibility of hyperinflation. Curious what odds you assign for each outcome?
  - nostrademons 5y ago
    Personally I think the answer is "all of the above", at different timescales. Long-term, I'm betting that it'll end in hyperinflation. But on the short term, asset prices tend to track nominal interest rates better than real ones, because investors have a hard time correctly predicting the effect of inflation on an individual firm's cash flows. (We saw this in the 1970s, where P/Es compressed from about 20 to about 8 in response to higher interest rates, but company profits also rose with inflation, so when interest rates normalized in the 80s stock prices took off.) So if the Fed raises rates, asset prices could crash by 50% or more, which may trigger them to drop rates again, which further pumps inflation and raises stock prices, which causes another cycle of tightening, etc. Expect things to get messy, and less predictable than they were before. The long-term trend is toward a worthless U.S. dollar and infinite stock prices, but there could be a lot of ups and downs before then.