Welcoming the Gas Age

The future of the world’s energy will likely be dominated by natural gas, as Methane hydrate joins shale gas and deep sea gas.

Writes Matthew Ridley at the Rational Optimist Blog

Move over shale gas, here comes methane hydrate. (Perhaps.) On Tuesday the Japanese government’s drilling ship Chikyu started flaring off gas from a hole drilled into a solid deposit of methane and ice, 300 metres beneath the seabed under 1000 metres of water, 30 miles off the Japanese coast.

The real significance of this gas flare probably lies decades in the future, though the Japanese are talking about commercial production by 2018. The technology for getting fuel out of hydrated methane, also known as clathrate, is in its infancy. After many attempts to turn this “fire ice” into gas by heating it proved uneconomic, the technology used this week – depressurizing the stuff – was first tested five years ago in Northern Canada. It looks much more promising.

Methane hydrate is found all around the world beneath the seabed near continental margins as well as in the Arctic under land. Any combination of low temperature and high pressure causes methane and water to crystallise together in a sort of molecular lattice. Nobody knows exactly how much there is, but probably more than all the coal and oil put together, let alone other gas.

The proof that hydrate can be extracted should finally bury the stubborn myth that the world will run out of fossil fuels in any meaningful sense in the next few centuries, let alone decades. In 1866, William Stanley Jevons persuaded Gladstone that coal would soon run out. In 1922 a United States Presidential Commission said “Already the output of gas has begun to wane. Production of oil cannot long maintain its present rate.” In 1956, M. King Hubbert of Shell forecast that American gas production would peak in 1970. In 1977 Jimmy Carter said oil production would start to decline in “six or eight years”. Woops.

The key will be cost. However, Japan currently pays more than five times as much for natural gas as America so even high-cost gas will be welcome there. The American economy, drunk on cheap shale gas, will not rush to develop hydrate. (Unlike oil, there is no world price of gas because of the expense of liquefying it for transport by ship.)

Read the rest here.

Chart of the Day: First Non European Pope in Nearly 1,300 Years

Chart from Reuters

Short non-related personal opinions

From the way headlines on the domestic mainstream media looked, it would seem that the Philippine candidate, Cardinal Luis Tagle, was shoo-in for the Papacy. [Sorry I didn't dwell on the articles] But this has hardly been the case from the perspective of international media.

Domestic media’s elaborate drumming up of the local cardinal represents no more than the sustained indoctrination of “nationalism”, which comes at the exclusion of the minority religions practiced locally.

Nevertheless, like his predecessor, the new Pope, Argentine Cardinal Jorge Mario Bergoglio, now Pope Francis I, has been said to be another anti-free market or pro-big government activist. [The Pope should see what big government has been doing to his homeland.]

We shall soon see.

Quote of the Day: The Religion of Democracy

Modern social theory clings to two ultimate presuppositions. First, men are motivated by economic self-interest. Second, democratic institutions can be used to limit the success of such special-interest groups. The ultimate special-interest group, which is not a special-interest group at all, but the general interest, namely, the democratic masses, will be victorious in history. This is the god of the modern world, and this god is defended by a priesthood. The priesthood is mostly academic, and what is not academic is embedded in the media. The professor and the anchorman are the high priests of this well-organized religion.

The professors and the anchorman resent any suggestion that there is a hidden group behind them that shapes their thinking. They resent the fact that some people say that they have been bought off. I think it is a mistake to imagine that buying off someone with money constitutes the whole story. They have not merely been bought off. They have bought in. They have bought into the outlook that democracy will triumph over the economic interests of special-interest capitalism.

The people who say that the priests of academia and the media have been bought off have not followed the money far enough. These priests have indeed been bought off, but they have been bought off in a very special way. They have been screened in terms of their confession of faith. Their confession of faith must be in favor of the religion of democracy. Anyone who deviates from this faith has not yet been promoted into the highest visible seats of priestly service.

These carefully screened spokesmen for the Establishment deeply resent any suggestion that behind the religion of democracy has always been a calculating group whose senior members believe that you can fool all of the people most of the time, and that you can fool most of the professors all of the time. They resent the fact that anybody would suggest that the way they attained their positions is based on crass payoffs. I agree. The payoffs are not at all crass. They are subtle. One of C.S. Lewis's greatest essays is "The Inner Ring." It describes the nature of the payoffs.

This is Austrian economist Gary North discussing conspiracy theories vs. the religion of democracy.

Applied to the Philippines, this reminds me of mainstream media networks whose slogan consists of claims of “walang pinapanigan” or “walang kinakampihan”—no biases.

Regret Theory: Japanese Consumers on Electric Cars

Regret theory is the difference between the actual payoff and the payoff that would have been obtained if a different course of action had been chosen (Wikipedia.org) 

In short, regret over a decision made (opportunity loss)

A McKinsey Quarterly research reveals that many electric car buyers in Japan feel remorse or were disappointed over their decision to acquire electric cars:

If electric vehicles (EVs) are to develop from a niche into a mass market, carmakers should learn from early adopters who say they may not buy one again. Our recent research on such consumers in Japan finds that about one-third of them fall into this category. These buyers said they were “seduced” by low energy costs, attractive subsidies, and a good test drive. But they were less well informed about EVs than were environmentally conscious “green enthusiasts” (who love EV technology for its low energy costs and comfortable driving experience) and became less enthusiastic about their purchase when they faced issues such as higher electric bills and locating places to charge their cars.

Japan’s government heavily promotes electric cars through subsidizes and or through tax discounts.

Yet the study exhibits how the stereotyped politically induced projects hardly meets the taste of the consumers, which is the critical reason for their failures.

As the great Austrian economist Ludwig von Mises explained 

The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or that is cheaper, they desert their old  purveyors. With them nothing counts more than their own satisfaction. They bother neither about the vested interests of capitalists nor about the fate of the workers who lose their jobs if as consumers they no longer buy what they used to buy.

Of course as I earlier posted, electric cars aren’t exactly "green" or environmental friendly as environmental zealots allege or want the public to believe.

Quote of the Day: The Taint Inherent in Absolute Power is Anti-Humanity

The corruption inherent in absolute power derives from the fact that such power is never free from the tendency to turn man into a thing, and press him back into the matrix of nature from which he has risen. For the impulse of power is to turn every variable into a constant, and give to commands the inexorableness and relentlessness of laws of nature. Hence absolute power corrupts even when exercised for humane purposes. The benevolent despot who sees himself as a shepherd of the people still demands from others the submissiveness of sheep. The taint inherent in absolute power is not its inhumanity but its anti-humanity.

This is from American Moral and social philosopher Eric Hoffer from Ch. 15: "The Unnaturalness Of Human Nature" of his book The Ordeal of Change (1963)

Video: Matt Ridley: Fossil Fuels are Greening the Planet

In a talk hosted by reasonTV.com, prolific author Matt Ridley talks about how fossil fuels, contra popular wisdom, have been contributing to the greening of the planet.

Dad Howard Buffet’s Wish for Son Warren Buffett Delivered

I earlier posted that the prominent libertarian Howard Buffett, father of one of the world’s richest man, Warren Buffett, wrote the great dean of Austrian economics Murray Rothbard to ask where he could buy the latter's book "The Panic of 1819".  That book was intended for his son, Warren.

 

Unfortunately for dad Howard, son Warren not only turned from a value investor into a political entrepreneur (crony) but embraced a political  philosophy that justified his actions, which runs diametrically in contrast with his dad.

Nonetheless, Austrian school professor and economist Mark Thornton fulfills dad Howard’s wish, 51 year after. 

Writes Daniel Sanchez at the Mises Blog 

Warren Buffett’s father Howard (an anti-New Deal and anti-interventionist Congressman) wrote to Murray Rothbard in 1962 about sending some of Murray’s books to his son. Judging from Warren’s recent comments, it seems the books were lost in the mail. So Mark Thornton has sent this care package to the billionaire investor.

  

Social Media in the Shadow of the War on Drugs

In the light of Mexico’s war on drugs, social media has reportedly replaced traditional media as the main source of information

From Juan Carlos Hidalgo of the Cato Institute,

Unfortunately, one of the biggest casualties from the bloodshed that besets Mexico is freedom of the press. Drug cartels have targeted traditional media outlets such as TV stations and newspapers for their coverage of the violence. Mexico is now the most dangerous country to be a journalist. However, a blackout of information about the extent of violence has been avoided because of activity on Facebook pages, blogs, Twitter accounts, and YouTube channels…

Andrés Monroy-Hernández from Microsoft Research presented the findings of his paper “The New War Correspondents: The Rise of Civic Media Curation in Urban Warfare” which shows how Twitter has replaced traditional media in several Mexican cities as the primary source of information about drug violence.

Hmmm. Things have been changing at the margins.

Fighting Bubbles: Hong Kong Banks Raises Interest Rates

This should be interesting and may serve as precursor to what will happen worldwide.

From Bloomberg, (bold mine)

HSBC Holdings Plc (HSBA) and Standard Chartered Plc (2888) raised Hong Kong mortgage rates for the first time since 2011, after the banking regulator tightened risk rules on concern a property bubble may undermine financial stability.

The lenders will raise home loan charges priced at the best lending rate by 25 basis points, starting today, they said in separate e-mailed statements yesterday. HSBC mortgages linked to the best rate will climb to a range of 2.85 percent to 3.15 percent, from 2.6 percent to 2.9 percent.

The Hong Kong Monetary Authority last month told banks to set the risk weighting for new residential loans at 15 percent or more, seeking to strengthen buffers after prices doubled to a record in the past four years. Prices may fall by as much as 20 percent over 24 months as mortgage rates increase and the government seeks to cool demand, Deutsche Bank said yesterday.

“Hong Kong banks won’t increase mortgage rates too much, as this would cause home prices to fall, which isn’t good for them,” Dominic Chan, an analyst at BNP Paribas SA in the city, said by telephone today. “With the larger banks increasing rates, the smaller ones will follow suit.”

If a mania has been in place, marginal interest rate increases will hardly prevent people from continuing the leveraged-based yield-chasing process. I have used the recent US housing bubble, as well as Thailand’s pre-Asian crisis as examples.

What happens instead is that as interest rate increases, projects erected behind low interest rates will begin to suffer losses. Bankruptcies then spreads from the periphery to the core or until it reaches a tipping point whereby accrued financial losses morphs into a crisis.

The idea of “modulating” interest rates to “manage” home prices ignores or overlooks the significance of  the market’s psychology, the essence of bubble activities and the basic laws of economics.

Bubbles represent misallocation of resources, which means they are unsustainable and eventually lead to capital losses which will be reflected on the economy.

And monetary tightening essentially exposes on the illusion of policy-induced booms.

As Dr. Frank Shostak writes,

Needless to say, bubble activities are not going to like this since the diversion of real wealth to them from wealth generators will slow down or cease all together.

A fall in economic activity in this case is in fact the demise of various bubble activities.

The demise of various bubble activities usually translates to a domestic crisis.

Electric Cars Aren’t Really Green

Contra popular wisdom, and opposite to the thrust by governments, e.g. US and Indonesia, to promote green energy via electric cars; electric cars aren’t really green. 

AEI’s Mark Perry summarizes the Bjorn Lomborg’s explanation published at the Wall Street Journal, (bold original)

1. A 2012 comprehensive life-cycle analysis in the Journal of Industrial Ecology shows that almost half the lifetime carbon-dioxide emissions from an electric car come from the energy used to produce the car, especially the battery. The mining of lithium, for instance, is a less than green activity. When an electric car rolls off the production line, it has already been responsible for 30,000 pounds of carbon-dioxide emission.

2. By contrast, the manufacture of a gas-powered car accounts for 17% of its lifetime carbon-dioxide emissions. The amount for making a conventional car:14,000 pounds.

3. The life-cycle analysis shows that for every mile driven, the average electric car indirectly emits about six ounces of carbon-dioxide. This is still a lot better than a similar-size conventional car, which emits about 12 ounces per mile. But remember, the production of the electric car has already resulted in sizeable emissions—the equivalent of 80,000 miles of travel in the vehicle.

4. If a typical electric car is driven 50,000 miles over its lifetime, the huge initial emissions from its manufacture means the car will actually have put more carbon-dioxide in the atmosphere than a similar-size gasoline-powered car driven the same number of miles. Similarly, if the energy used to recharge the electric car comes mostly from coal-fired power plants, it will be responsible for the emission of almost 15 ounces of carbon-dioxide for every one of the 50,000 miles it is driven—three ounces more than a similar gas-powered car.

5. Even if the electric car is driven for 90,000 miles and the owner stays away from coal-powered electricity, the car will cause just 24% less carbon-dioxide emission than its gas-powered cousin. This is a far cry from “zero emissions.” Over its entire lifetime, the electric car will be responsible for 8.7 tons of carbon dioxide less than the average conventional car.

6. Those 8.7 tons may sound like a considerable amount, but it’s not. The current best estimate of the global warming damage of an extra ton of carbon-dioxide is about $5. This means an optimistic assessment of the avoided carbon-dioxide associated with an electric car will allow the owner to spare the world about $44 in climate damage. On the European emissions market, credit for 8.7 tons of carbon-dioxide costs $48.

7. Yet the U.S. federal government essentially subsidizes electric-car buyers with up to $7,500. In addition, more than $5.5 billion in federal grants and loans go directly to battery and electric-car manufacturers. This is a very poor deal for taxpayers.

The world of politics is about smoke and mirrors.

Quote of the Day: The State is a Soulless Machine

It is my firm conviction that if the State suppressed capitalism by violence, it will be caught in the coils of violence itself, and fail to develop nonviolence at any time. The State represents violence in a concentrated and organized form. The individual has a soul, but as the State is a soulless machine, it can never be weaned from violence to which it owes its very existence

This quote is from Mahatma Gandhi, a political leader and inspiration to India’s independence via non-violent resistance movement, from his The Non Violent State Essay

South Korea: Mini Skirt Regulation Provokes Outrage

All sorts of civil restrictions seem to be cropping up from governments worldwide.

In South Korea, new regulations on mini skirt, which domestic officials label as “excessive” public exposure, have prompted for public outrage.

From Korea Times

A decree to fine those who engage in “excessive” public exposure passed at a Cabinet meeting presided over by President Park Geun-hye ignited controversy Monday.

The decree is expected to go into effect starting March 22.

People were outraged by the 50,000 won fine, as it brought back memories of similar restrictions on skirt lengths in the 1970s under the rule of the late President Park Chung-hee.

Many netizens criticized the decree as a signal of a return to the authoritarian era.

Social networks services, such as Twitter and Facebook, were buzzing with critical comments ― ranging from who decides the standards of decency to whether the decree will apply to swimming pools and gymnasiums.

Considering that South Korea ranks as one of the most wired or web connected nation in the world, it would be interesting to watch the forces of decentralization “netcitizens” square off with her centralized government.

The trend to regulate everything seem also an offshoot to bubble cycles, where the expanding sphere of political control represent growing signs of desperation by political forces over failed policies. Such also signifies the attempt to divert the public's attention from real problems.

Video: Real Estate "Frenzy" in California

Central bank policies have been fueling a mania on a vast category of asset prices worldwide.

The following video reveals signs of a growing real estate frenzy in California (source: Calculated Risk). 

Note of the term used by the video anchor "bidding war", "it's a frenzy, "psychedelic" and "people want to know how hot it is".

Abenomics Hurting Japanese Consumers

Japan’s PM Shinzo Abe’s aggressive interventionist economic policies, popularly known “Abenomics”, or in reality “riches to rags” policies appear to be hurting domestic household consumers far more than the much touted "competitiveness" benefits it has been meant to provide.

From Nikkei.com 

Households are beginning to feel pinched by the weaker Japanese currency, which has resulted in higher costs for gasoline and some consumer goods.

The average price of regular gasoline rose to an eight-month high of 150 yen per liter on Tuesday, up 1.2 yen from a week earlier, according to data released on Thursday by the Agency for Natural Resources and Energy. The price has climbed 4.5 yen, or 3%, since late November, when the yen's downswing started. The dollar-based price of crude oil has remained steady since November, but the yen's slide by about 10 yen to the dollar has resulted in higher import prices.

The price of kerosene rose to a nine-month peak. Growing demand due to a cold spell have pushed the price of the fuel up more sharply than other petroleum products.

Japanese have been traveling less too...

From Bloomberg,

Japanese visits to Korea have fallen five straight months to the lowest in two years in January, according to the Korea Tourism Organization. Korean Air Lines Co. passenger traffic between the two countries fell 9 percent last quarter from a year earlier, the biggest drop since the second quarter 2011, after Japan was struck by its most powerful recorded earthquake.

The 13 percent decline in the yen against the won since the start of December prompted Japanese tourists, who account for the biggest portion of foreigners traveling to Korea, to cut spending. To weather the downturn, Korean companies that relied on Japanese visitors are offering charter flights and prizes to lure Chinese who more than doubled their spending in January and February from a year earlier at Lotte Duty Free…

The number of Japanese tourists in Korea dropped 22 percent to 683,182 between November and January from the same period a year earlier, according to the Korea Tourism Organization. About 3.52 million Japanese visited Korea last year where the average visitor spent $1,273, generating approximately $4.5 billion in revenue, based on information from the Korea Tourism Organization and Korea Culture and Tourism Institute.

It won’t be long when Abenomics will be exposed for its quackery, and blow up into smithereens, perhaps via popular unrest and or a debt crisis.

How Collectible Markets Performed

Since the US Federal Reserve went into an expansionary mode in order to supposedly "reflate" the US economy following the dot.com bust, the collectible markets seems to have been one of the major beneficiaries of such policies
 

According to CNBC’s Robert Frank

According Knight Frank's Wealth Report, an index of the nine main collectibles markets grew by 175 percent over the past 10 years – a far better record than U.S. stocks. All nine categories tracked by Knight Frank increased in value except collectible furniture.

Over a ten year period, classic cars, coins, stamps and fine arts returned about 200% and above.

However, popular themes lagged. Again from the CNBC,

As Knight Frank says, however, "performance doesn't go hand in hand with popularity." Sometimes the most beloved collectibles are dogs as investments.

Art remains far and away the most widely collected collectible among the world's wealthy and affluent. The world's millionaires plan to increase their spending by 13 percent on art this year. 

The second most popular collectible is watches – led by Asian collectors. That was followed by fine wine, jewelry and then cars.

Bottom line: The impact of central bank policies on asset prices are different. Also, popular themes may not be the best choice.

Quote of the Day: To Forestall Armageddon, Central Banks cap the Price of Gold

It is important to the Federal Reserve’s low interest rate policy to suppress the bullion price. If the prices of gold and silver continue to rise relative to the US dollar, the Fed cannot keep the prices of bonds high and interest rates low. If the dollar is widely perceived to be declining in value in relation to gold, the price of dollar-denominated assets will also decline, including bonds. If the dollar loses value, the Fed loses control over interest rates, and the US financial bubble pops, with hell to pay.

To forestall armageddon, the Fed and its dependent banks cap the price of gold.

This is from Paul Craig Roberts, former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal at the lewrockwell.com

Laffer Curve Russian Edition: 300K Entrepreneurs Quit over Taxes

Politicians hardly ever consider the economic effects of their actions. They almost see things as operating in a stasis.

Well here is another instance of the Laffer curve (elasticity of taxable income) in action, this time in Russia

From Rianovesti or en.ria.ru

Almost 300,000 self-employed Russians have quit business in Russia in the past three months due to social tax hikes, an Economics Ministry official said on Monday.

From January 1, 2013, the Russian government doubled the annual fixed-sum social security tax for individual entrepreneurs to 36,000 rubles ($1,200), in a move that directly affected babysitters, housemaids, tutors, handymen and other self-employed Russian workers earning 50,000-100,000 rubles a year.

“The new tariffs that came into force from January 1, 2013 and doubled the taxation base for fixed-rate payments reduced the number of individual entrepreneurs by 293,421 people between December 2012 and February 2013,” said Natalia Larionova, director of the ministry’s department for small-medium enterprise business and competition.

That represents 7 percent of the total number of individual entrepreneurs registered in Russia, she said.

Bottom line: When you tax something you get less of it. On the other hand when you subsidize something, you get more of it.

Indian Government Agencies Squabble over Inflation

I have been saying here that QE has not been a practice limited to developed economies, but has become a global central bank operating standard.

In India, in what seems as pot calling the kettle black, two government agencies wrangle over who is responsible for causing of “inflation”.

From Bloomberg, (bold mine)

The biggest critic of India’s $100 billion budget deficit is also one of the largest purchasers of the debt that finances it: the central bank.

The Reserve Bank of India faults government expenditure for stoking inflation even as its sovereign-bond holdings have risen to $91 billion from negligible amounts in 2008. While it has a mandate for price stability -- like counterparts in the U.S., Europe and Japan -- the RBI has another charge its peers lack: ensuring the government achieves its borrowing program.

The RBI’s ability to damp the cost of living may be further curtailed by record government borrowing and spending next fiscal year, stoking demand and prices in an economy facing supply constraints. The inflation threat adds pressure on India to join nations from the U.S. to Brazil in separating debt management from inflation control. A bill to do so has been sent for cabinet approval, two Finance Ministry officials said…

The bank holds about 27 percent of the sovereign bonds issued since 2008, when its holdings stood at $2.5 billion, according to calculations by Bloomberg News based on RBI data.

The late great dean of the Austrian school Murray Rothbard lucidly explains the disparity between budget deficits/deficit spending and inflation: (bold mine)

Deficits mean that the federal government is spending more than it is taking in in taxes. Those deficits can be financed in two ways. If they are financed by selling Treasury bonds to the public, then the deficits are not inflationary. No new money is created; people and institutions simply draw down their bank deposits to pay for the bonds, and the Treasury spends that money. Money has simply been transferred from the public to the Treasury, and then the money is spent on other members of the public.

On the other hand, the deficit may be financed by selling bonds to the banking system. If that occurs, the banks create new money by creating new bank deposits and using them to buy the bonds. The new money, in the form of bank deposits, is then spent by the Treasury, and thereby enters permanently into the spending stream of the economy, raising prices and causing inflation. By a complex process, the Federal Reserve enables the banks to create the new money by generating bank reserves of one-tenth that amount. Thus, if banks are to buy $100 billion of new bonds to finance the deficit, the Fed buys approximately $10 billion of old Treasury bonds. This purchase increases bank reserves by $10 billion, allowing the banks to pyramid the creation of new bank deposits or money by ten times that amount. In short, the government and the banking system it controls in effect "print" new money to pay for the federal deficit.

Thus, deficits are inflationary to the extent that they are financed by the banking system; they are not inflationary to the extent they are underwritten by the public.

The RBI can always opt NOT to finance the government deficits via QE or debt monetization. But such would undermine the reason for their existence.

At the end of the day, all such manipulations and political accommodations through central banking inflationism will have nasty consequences.

Quote of the Day: Real Austerity is Economic Freedom

But what is austerity? Real austerity means that the government and its employees have less money at their disposal. For the economists at the International Monetary Fund, “austerity” may mean spending cuts, but it also means increasing taxes on the beleaguered public in order to, at all costs, repay the government’s corrupt creditors. Keynesian economists reject all forms of austerity. They promote the “borrow and spend” approach that is supposedly scientific and is gentle on the people: paycheck insurance for the unemployed, bailouts for failing businesses, and stimulus packages for everyone else.

Austrian School economists reject both the Keynesian stimulus approach and the IMF-style high-tax, pro-bankster “Austerian” approach. Although “Austrians” are often lumped in with “Austerians,” Austrian School economists support real austerity. This involves cutting government budgets, salaries, employee benefits, retirement benefits, and taxes. It also involves selling government assets and even repudiating government debt

(bold mine)

This is from Professor Mark Thornton at the Mises.org.

The mainstream has been resorting to the strawman argument by distorting the definition of “austerity” and by repeatedly trying to link bankster “Austerian” approach, which has been a failure with, the Austrian school’s real austerity.  

Real austerity is about economic freedom

Video: Peter Schiff Versus John Mauldin on US Dollar and Deficits

The following video exhibits the extemporaneous debate between Peter Schiff and the populist analyst John Mauldin on the US dollar and deficits. 

The Zero Hedge make this observation, (bold original)

Based on the coming 'oil revolution', John Mauldin makes the point that the US can run $300-400 billion deficits and the Fed "can print trillions" and the dollar will surge (since the rest of the world demands it). Peter Schiff begins quietly adding that "we don't have that much oil" then goes on to discuss the 'ifs' in Mauldin's thesis, beginning the wildcard that "we can't suppress interest rates indefinitely" as we await this supposed oil export boom to begin - and that somehow the US is expected to generate a budget surplus when even the perpetually optimistic CBO in its most recent forecast gave up on expecting a surplus in the future of America. Ever. The ensuing 3 minutes or so is worth the price of admission as Dollar bull meets Dollar bear in a nose-dripping, face-ripping trip into the future.

Note that Mr. Mauldin sees the world in the light of statistics or mathematical equations or "macro", while Mr. Schiff shreds on the contradictory logic behind them

Start at 5:25