Economics – Page 6 – Outrun Change

Ongoing violence in Venezuela against those who merely want to their children to eat

In Venezuela, above activity is sufficient to draw weapon fire or armored tanks. Image courtesy of Adobe Stock.

The violence in Venezuela directed against those people who merely wish to keep their children from starving continues.

My previous comment: 4/19/17 – Washington Free Beacon – Socialist Venezuela Leader Steps up Arming of Supporters After Outlawing, Confiscating Civilian Guns – The government has spent the last five years confiscating guns from private citizens. That’s what authoritarian, totalitarians, and other bad governments do.

Why? So they can’t defend themselves.

From what might individuals need to defend themselves from?

How about 400,000 loyalists who are going to be armed by the government. Continue reading “Ongoing violence in Venezuela against those who merely want to their children to eat”

“Magic without wizards”, or, why is your favorite bread on the shelf when you want it?

Consider merely the way that your favorite bread is always available, usually from many bakeries. And at the time you want. The bakery doesn’t know whether you will stop in on your way to work, during lunch, or after having dinner.

How can it be that several bakeries know to have your choice of bread available, whether sourdough loafs, whole wheat biscuits, rye rolls, croissants, or cranberry bagels? How did they know to order enough yeast, oil, and flour? How did they know what mix to bake before the sun came up?

How did the wholesalers know enough to deliver the right amount of flour to all the pizzerias, bakeries, and pastry shops?

How did the farmers know enough to plant the right amount of wheat, oats, barley, and rye last spring to harvest enough this fall to satisfy all those bakers?

Hmm. What could be getting all those people working together to make sure my favorite and your favorite bread is available when you or I want it?

Ponder these and many more questions just in terms of having bread on the shelf in this video, called “It’s a wonderful loaf:”

[youtube=https://youtu.be/ljULutAUL7o?t=33]

The answer of how all that happens is readily available for all who want to find it.

Continue reading ““Magic without wizards”, or, why is your favorite bread on the shelf when you want it?”

An illustration of the horrible economics of residential rooftop solar power

Wealth transfer to wealthy under construction. Image courtesy of Adobe Stock.

Robert Bryce explains in an editorial at the Wall Street Journal on 4/18/17 the lousy economics of rooftop solar panels: Thanks for Giving Me Your Tax Money.

Mr. Bryce appreciates each of us for giving him our money. Of course, it was done through the tax system so it wasn’t much of a gift. Anyone who did not go along with funding his lark would have to spend some time in jail.

He explains he installed a 8,540 watt solar system on his roof. That means the 28 panels generate 301 watts each.

I have been wanting to see financial results from an actual rooftop installation. Mr. Bryce provides a set of actual numbers.

Here is the breakdown of the actual cost:

$7,758 – federal tax subsidy
6,593 – subsidy from city owned utility
18,100 – his out-of-pocket costs
32,451 – total cost

That means you and I covered 44% of the cost.

He says his system is generating about 12 ~~mWh~~ MWh of electricity a year.

Hmm. That would be about 32.9 kWh a day. For a system with 8,540 watt capacity, the potential, or faceplate capacity is 205.0 kWh each day. So what’s the capacity production on his system?

Continue reading “An illustration of the horrible economics of residential rooftop solar power”

Freedom continues to evaporate in Venezuela as misery continues to increase. Hmm. Why do those two trends typically seem to accompany each other?

What economic system produces this result? Image courtesy of Adobe Stock.

Ponder what economic system produced this suffering, misery, and loss of freedom.

4/19/17 – Wall Street Journal – Venezuela Antigovernment Protests Turn Deadly – Teargas and gunfire broke up widespread protests on Wednesday.

The death toll rises. Two dead on Wednesday with many more surviving gunshots they received. Seven dead in the last month. Forty-two dead in 2014.

Shooting protesters after stealing all their guns is just how authoritarians and totalitarians tend to roll:

4/19/17 – Washington Free Beacon – Socialist Venezuela Leader Steps up Arming of Supporters After Outlawing, Confiscating Civilian Guns – The government has spent the last five years confiscating guns from private citizens. That’s what authoritarian, totalitarians, and other bad governments do.

Why?

So they can’t defend themselves.

From what might individuals need to defend themselves from?

Continue reading “Freedom continues to evaporate in Venezuela as misery continues to increase. Hmm. Why do those two trends typically seem to accompany each other?”

Venezuelan Supreme Court usurps all power of the nation’s legislature

Where the Venezuelan Supreme Court filed that part of their constitution defining the legislative branch. Image courtesy of Adobe Stock.

The Supreme Court of Venezuela ruled that it will take over all of the powers of the Congress. That essentially suspends the Congress and removes the remaining power center in the country that is not under the complete control of the president.

Since the president controls the supreme court and obviously now controls the legislature, there is no organized structure that can oppose him.

That’s a major step.

For more info, check out any of the following articles.

For entertainment, consider the spin some headline writers put into their work:

Continue reading “Venezuelan Supreme Court usurps all power of the nation’s legislature”

Now gasoline shortages in the country with the world’s largest amount of proven oil reserves. What economic system could possibly create this mess?

In Venezuela, that sign is needed at hospital pharmacies, bakeries, and now at gasoline stations. Image Courtesy of Adobe Stock.

The shortages and suffering in Venezuela continues. Your homework for the day: what economic system provides this level of suffering?

Foreign reserves are shrinking
Bakeries threatened if they bake too many sweets and not enough price-controlled bread
Pregnant women are leaving the country to deliver their babies
Gasoline shortages appear

3/1/17 – CNN Money – Venezuela is down to its last $10 billion – The country’s foreign reserves are down to $10.5B, from $20B in 2015, and $30B in 2011. That info in sourced to the Central Bank of Venezuela.

Article says inflation is expected to hit 1660% this year and 2880% in 2018.

3/13 – PanamPost – Venezuelan Regime Threatens to Expropriate Bakeries, Jeopardizing Bread – In addition to price controls and currency controls, the government is going to impose output requirements on bakeries. If they don’t produce bread all day at the government limited price, they are subject to take over by the government. Left out of their miscalculation is that the government has stopped importing wheat flour.

If bakeries don’t bake enough bread, the government will close the shops.

3/16/17 – Yahoo News – Venezuela arrests brownie and croissant bakers in ‘bread war’ – Well, that didn’t take long.

Continue reading “Now gasoline shortages in the country with the world’s largest amount of proven oil reserves. What economic system could possibly create this mess?”

Suffering gets worse in Venezuela

Shipwreck standing on the beach with the sea in the background. Margarita Island. Venezuela. Photo courtesy of DollarPhotoClub.com

Still more indications the humanitarian crisis continues to deepen:

People killing wild animals just to get a little meat on the table
Government can’t even issue passports
Use the “Maduro diet”, lose 19 pounds in a year

2/10 – Fox News – Venezuelans killing flamingos and anteaters to stave off hunger amid mounting food crisis – Researchers for a university have found 20 flamingo carcasses, each with the breast meat and torso removed. Carcasses of dogs, cats, donkeys, and giant anteaters have been discovered at city dumps. That illustrates the desperation so many people experience in trying to find meet for their diet.

Experts point out those wild animals can carry lots of little nasties that can hurt humans.

Article explains the severity of inflation by providing some data points. Here is what you can buy for half of the minimum wage for an entire month:

Continue reading “Suffering gets worse in Venezuela”

Updates on continuing suffering in Venezuela – #20

Venezuela doesn't have enough money to get tankers out to international waters. Image courtesy of Adobe Stock. — Venezuela doesn’t have enough money to scrub down hulls of tankers so they can enter international waters. Image courtesy of Adobe Stock.

The suffering continues without a break. One of the more ominous articles describes that Venezuela is so short of currency that the national oil company cannot afford to scrub down the hull of oil tankers, which is required before they enter international waters – the country cannot even get the oil in those loaded tankers to market.

1/6 – Wall Street Journal – Venezuela Tees Up Its Next Dictator – The Venezuelan president faces a recall election this year. It looks like in anticipation of losing the election, a new vice president has been appointed. Under the country’s rules, if the president lost a recall before the end of 2016, there would have been a new election. If he is voted out after the first of 2017, the VP will take over.

The editorial points out the new VP will likely continue the present policies. He was previously a follower of the previous president. WSJ reporting indicates while the new VP was governor of a state, there were two Iranian companies (owned by the Iranian military) who had joint ventures with military in that state. More info in the editorial pointing to the new guy won’t be a change in direction.

Thus the opposition needs to decide which dictator they wish to rule them.

1/9 – International Business Times – Nicolas Maduro raises minimum wage in Venezuela by 50% – Continue reading “Updates on continuing suffering in Venezuela – #20”

Higher denomination bills still not available in Venezuela. Oh, by the way, socialism kills.

Well, never mind about turning in those worthless bills.

12/17 – Wall Street Journal – Venezuela Extends Use of 100-Bolivar Note to Jan. 2 – Since the large denomination replacement bills are not ready, the government graciously and on spur-of-the-moment decided to let people have until January 2 to turn in all their 100 Bolivar notes, each of which is worth about three US cents. By government dictat, the 100 bills will be valid until 1/2/17.

12/19 – Wall Street Journal – Venezuela Deploys Troops After Weekend Riots – Looting is spreading. Government sent 3,000 soldiers to the state of Bolivar after looting there.

12/30 – Associated Press at Wall Street Journal – Venezuela’s President Once Again Extends 100-Bolivar Note’s Deadline – Deadline to turn in all 100 Bolivar bills before they become null and void has been extended a second time. Venezuelan citizens have until January 20 to turn in all the old bills.

The problem? The higher denomination bills are still not ready for distribution.

12/25 – New York Times – No Food, No Medicine, No Respite: A Starving Boy’s Death in Venezuela – Focus of the article is not on surgeons who operate on bloodied tables because there is not enough water to wash it off, let alone enough sterilizing solution to make it clean. Neither is the focus on psychiatric hospitals where the lack of medicine’s forces the staff to tie psychiatric patients to their chairs.

That’s the state of medicine in Venezuela, but instead the article focuses on the death of one 16-year-old young man.

Continue reading “Higher denomination bills still not available in Venezuela. Oh, by the way, socialism kills.”

If you like having gas for your car, food in the stores, and turning lights on after dark, here’s good news: Outlook for energy looking brighter.

Gonna' be seeing more of those in North Dakota soon. Photo by James Ulvog. — Gonna’ be seeing more of those in North Dakota soon. Photo by James Ulvog.

Outlook for energy production in the US is getting better and better. Might want to get out your sunglasses.

Low oil prices have spurred innovation amongst US drillers; file this under unintended consequences for OPEC.
Breakeven prices in US shale approaching that of OPEC producers; ponder that the breakeven price for Saudi Aramco is not the same as breakeven price for the Saudi government.
Overview of news in 2016 for oil & gas; good news for companies that survived the year.

12/2 – Tyler Morning Telegraph – Saudis awakened a sleeping giant when they declared war on fracking – Editorial says the Saudis made a serious mistake waking up the slumbering giant of fracking land. The artificially high prices allowed the frackers to get started. The artificially low prices forced them to innovate, cut costs, and start producing at breakeven points competitive to the OPEC giants. Not a good move.

Wouldn’t it be grand if that paragraph was the four-sentence history of fracking?

Production costs are half what they were two years ago.

Continue reading “If you like having gas for your car, food in the stores, and turning lights on after dark, here’s good news: Outlook for energy looking brighter.”

Largest denomination Venezuelan currency in circulation voided without any larger bills to replace them. #18

The poor living in those houses in Caracas are suffering greatly as a result of intentional government policies. Photo courtesy of Adobe Stock.

The devastation in Venezuela would be funny if this was a make-believe movie or some hair brained dystopian novel. Sadly, we are watching live as millions of real people suffer from deliberate government policies.

The current 100 Bolivar note has been voided while the higher denomination bills have not been put into circulation. Sounds like a good plan to make hungry people hungrier.

12/13 – Fusion – Venezuelans fight to protect their savings as government pulls bills from circulation – After the government gave short notice that the largest bill, the 100 Bolivar note, will be pulled from circulation, people across the country have gone into panic mode to get their currency deposited in a bank.

Anyone who can’t get their money deposited by today, Wednesday, has 10 days to exchange the bills at a government location.

Only problem with that concept?

The government hasn’t announced any authorized exchange locations.

12/16 – Bloomberg – Venezuelan Odyssey for Cash Endures With Delay of New Bills – Surprise, surprise! The new bills, up to a 20,000 Bolivar note, weren’t available on Thursday.

Continue reading “Largest denomination Venezuelan currency in circulation voided without any larger bills to replace them. #18”

Another round of intentionally caused suffering in Venezuela as government makes largest denomination bill illegal- #17

One graph illustrates the inflation rate in Venezuela and the other represents economic performance. Image courtesy of Adobe stock.

Government will withdraw all 100 Bolivar notes from circulation after Wednesday, tomorrow. The level of suffering will increase even further.

12/4 – AP – Venezuela to issue larger bill as currency continues to melt – Article says the central bank has announced they will issue bills in the 500 to 20,000 Bolivar range. This follows up on previous reports saying they were planning to do so.

The exchange rate is now 4,587 Bolivars to the dollar.

Article says that is a deterioration by a factor of five in the last year.

The official exchange rates are 10 and 663 to the dollar.

12/10 – BBC News – Venezuela seizes Christmas toys to distribute to poor – Continue reading “Another round of intentionally caused suffering in Venezuela as government makes largest denomination bill illegal- #17”

Continuing devastation in Venezuela – #16

You know things are horribly bad when the New York Times and Washington Post are frequently reporting on the economic devastation in the socialist paradise of Venezuela.

11/25 – New York Times – Venezuelans Flee in Boats to Escape Economic Collapse – Mass numbers of people are fleeing Venezuela by foot, air, and now on rickety boats. The lack of food, water, electricity, and medical care is driving people away, reminiscent of the flood of people paddling away from Cuba on tied-together inner tubes.

Continue reading “Continuing devastation in Venezuela – #16”

Musing on oil prices and the oil industry; future for shale is looking good

Out of focus picture by James Ulvog. — Out of focus photo by James Ulvog. (Yeah, yeah, I know – don’t give up my day job.)

First article below says that predicting oil prices is a fool’s errand. The payoff of trying to do so, it seems to me, is it requires diving into the dynamics and trying to understand the production and demand aspects underlying the price of oil. Second article below delves into the dynamics.

11/28 – The Million Dollar Way – Musings on Shale as We Anticipate the “OPEC Meeting” – Discussion points me to the next article, which I would have missed otherwise.

Mr. Oksol agrees with the major points: OPEC’s effort (meaning Saudi Arabia) to shut down shale producers has been unsuccessful. They tried this once before back in the 1980s.

On the second point, he agrees shale producers will respond fast to any rise in prices.

Author agrees that the phrase “big bet” is an acceptable way to describe the Saudi strategy to take out shale producers but thinks a more accurate description would be “trillion dollar mistake.” As for me, either description works well.

11/28 – Mark Mills at Forbes – Shale Wars: Whither Oil Prices As Saudi Arabia Lets The Big Bet Play Out? – The author, to whom you need to pay serious attention if you are otherwise reading my blog, asks two questions on his way to sort out where oil prices are going:

How much damage has Saudi Arabia caused the shale drillers? In other words will they be able to respond to any change in prices are they out of the game.
If the answer is yes, how fast will shale drillers be able to respond?

Continue reading “Musing on oil prices and the oil industry; future for shale is looking good”

“Currency and the Collapse of the Roman Empire” infographic

Silver Roman denarius. Photo courtesy of Adobe Stock.

Telling the tale of the collapse of the Roman Empire is a challenge even in a full length book. Presenting one slice of the story in an easily read and understood infographic is even more of a challenge.

The Money Project is a blog run by Visual Capitalist which focuses on illustrating complex ideas. Their infographic Currency and the Collapse of the Roman Empire does a great job of describing how debasement of the currency and the resulting inflation made trade more difficult which in turn contributed to the collapse.

Oh, used with permission of Visual Capitalist.

A great story with many lessons to be learned for anyone willing to think for a while:

Continue reading ““Currency and the Collapse of the Roman Empire” infographic”