Title : Idle Rambling On A Rainy Saturday Morning -- September 22, 2018
link : Idle Rambling On A Rainy Saturday Morning -- September 22, 2018
Idle Rambling On A Rainy Saturday Morning -- September 22, 2018
Peak oil? Maybe. Two stories coming out this past week. Russia may be facing peak oil production. Then the second story: Saudi Arabia -- Saudi Arabia worries that it may not be able to supply enough of the "right type" of oil.The Saudi Arabia story is an interesting story. First, we've talked about this before. I said that if there is a shortage of oil with the Iranian sanctions it will be a shortage of the "right" kind of oil and because the story is too complicated to sort out for most traders, it seems, if the price of the "right oil" increases, it will pull the price of "all" oil higher.
The second reason the Saudi story is interesting: it gives the lie to Saudi's claims that it has inexhaustible space capacity. Hardly. And look at the current production number: 10.4 million bopd -- that's basically where Saudi has been for years.10.4. And the US: easily at 11 million bopd, link here. I guess the all-time record was set last June at 10.7 million bopd. From Forbes, more recently:
We also know that weekly U.S. crude production has averaged an all-time record 11 million b/d for the past two weeks, a 16% boom since early-January. We've passed Russia to become the largest crude oil producer in the world, yet at over 13 million b/d, we have been the "largest oil producer" for years now. Although a very large one, "crude" is only a subset of "oil."
Indeed, the future shines even brighter for the U.S. oil industry: the International Energy Agency just reported: "the shale sector as a whole is on track to achieve, for the first time in its history, positive free cash flow in 2018." Investments were up 60% last year and are expected to be up another 20-25% in 2018.
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$30 Trillion
US household net worth: exceeds $100 trillion.
I guess it depends which movie you are watching, even if both movies are on the same (CNBC) networ:
- From earlier this summer: $30 trillion is about to change hands in the US. There's a lot of money about to change hands in the U.S. — $30 trillion to be exact. Baby boomers are the wealthiest generation in American history — and they're about to pass down those riches over the next few decades. It's the so-called great wealth transfer. Link here to CNBC. That was in July, 2018.
- Earlier in the year, in May, 2018, "That $30 trillion great wealth transfer is a myth" -- link to CNBC.
The $30 trillion is accurate. But some argue that those with the $30 trillion are living longer and will spend it on themselves. Mostly for healthcare, I assume. And perhaps a trip around the moon. But does it matter whether $30 trillion is spent by the generation that "built it" or their heirs. It's still $30 trillion going into (mostly) the US economy.
Having said that, I attended a Schwab luncheon this past week and the financial advisors are all over this $30 trillion "wealth transfer."
It should be noted: under Trump, $22 million, per couple, is exempt from the death tax. Per person, $11 million. But note: this "sunsets" in 2025 and goes to zero.
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