Oil Indicator Turns NEGATIVE!

Net

Energy

Decline

Three Theories Behind the Global Productivity Slowdown

Money - Dollars – Euros – Yen – Rubles or any other currency what you are really discussing is ENERGY.  Money and productivity are tied to energy. Productivity enhancing devices developed in our recent past – railroads, cars and trucks – airplanes – telephones – electricity – urban sanitation – TV and radio etc.  MODERN CONVENIENCES that are taken for granted have been provided to the poorest as a result of American’s having abundant cheap sources for oil, gas, and coal.  Productivity fall offs in the short term can be attributed to negative governmental policy [as expressed in the article]; however over the long term it is abundant NET energy.

Net energy is domestic energy minus energy imports.  Any wonder why President Trump has made this statement repeatedly: “To the victor so go the spoils!”  Hence the Middle East becomes a domestic energy reserve powering America’s economy.  No doubt an American first policy would strike fear into any energy dense nation – including Russia! 

Oil 
INDICATOR
1/26/17
Updated Monthly

Oil Prices: 
01/25/16....$28.27

01/24/17....$54.25   

UP 92%(rounded)
(oil prices approximately one year earlier due to weekends & holidays)
ANS West Coast prices   

 OIL INDICATOR  Negative

Oil prices are well known for their volatility in the short term, longer term due to dwindling reserves energy prices are in a secular bull market.  Technologies such as fracking will extend the life of oil fields but major new discoveries arrive at a snails pace far slower than the world's growth.  

As long as prices rise in a slow and orderly pace our economy can adjust to those changes, however if prices spike (international tensions, war etc.) high energy costs behave as a massive deflationary tax. This will send our economy tumbling down and very possibly the U.S. stock market.

If oil prices rise greater than 75% from one year earlier, investors at that time should shift their portfolio geared towards deflationary times.  This would be an oil indicator as negative.

If oil prices rise from one year-earlier less than 10% or drop then the inflationary play is in effect; a positive for economic growth along with possible higher stock prices.

Where to find one year-earlier oil prices?  Alaska Department of Revenue    

Oil indicator positive                

20%  REIT's

20%  Energy

20%  P.M.'s

40%  Small Caps

  0%  Lt. Gov't Bonds

Oil indicator negative

  5%  REIT's

10%  Energy

10%  P.M's

10%  Small Caps

65%  Lt. Gov't Bonds

Vanguard Funds

REIT's

REIT Index Admiral  VGSLX

Energy

Energy Fund  VGENX

Precious Metals (P.M.'s)

Precious Metals and Mining Fund  VGPMX

Small Caps

Small Cap Value Index Admiral  VSIAX

Long Term Government Bonds

Long-Term Government Bond Index Admiral  VLGSX

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