Saturday, February 28, 2015

The Economic Plumbing Problem

The big pipes in the United States are stopped-up and are nearly ready to burst.

The oil workers strike is a month old following a massive explosion. This is artificially raising the price of gas at the pump while at the same time the surplus of crude oil continues to gain at an alarming rate.

The west coast ports were effectively slowed down by pressure from labor, creating a bottleneck of ships at sea waiting to offload. After weeks, many chose to leave for the Louisiana ports. Meanwhile, there appears to be no perceptible shortages because inventories are swelling anyway and new orders have dropped dramatically.

The rationale for raising employee wages seems to be to stave off the growing influence of unions.  Hopefully raising wages will recapture the waning demand, but it won't be enough to create the disposable income needed from a growing number of students enslaved by college loan debt. The bandwagon for predicting another stock market crash is on its way out of the barn.