Econo-Quickie: Deep Denial and Its Solution

Posted by LK on 7/16/08 • Categorized as Energy: alt and conventional, Politics, Psychology, The Economy and Markets

In rough, round numbers, the U.S. consumes around 20 million barrels of oil/day. Just released data indicates that crude oil inventories increased by 3 million gallons. A bit more than a sixth of a day’s worth. And the equity markets, desperately looking for a positive data point, grab this one and run with it.

We’re going to get what we deserve. An economy that looks a lot like the rest of the scorched earth that Dubya will leave behind. The Emperor will eventually be seen to have no clothes.

If Obama’s elected, he’d be wise to trot out his supporter Paul Volcker to explain to the nation that there’s some pain to be gone through while the excesses are wrung from the system. Volcker can refer to his success in the ’80s in which he, as Chairman of the Federal Reserve, inflicted relatively short term pain on the nation (around 5 years worth) in order to have it followed by long term (20 years) prosperity.

This may well make Obama the best one term president in American history.

Full disclosure: I have nothing to disclose at the moment (although that could change at any time), as I’ve found it less painful to step aside when I have no clue, than to freeze like a deer in the oncoming headlights.