Further to my observations a few days ago that Trump is reviving the “animal spirits” necessary for an economic boom are some survey results that bolster the point, courtesy of the Daily Shot folks. Start with the National Federation of Independent Business’s Optimism Index, which clear show the Trump election bump:
Then take a look at the NFOB’s sales expectation survey:
Heck—the Trump effect may go global, as this international survey suggests:
Meanwhile, on the oil front, oil shares rallied a few weeks back when OPEC and Russia announced a deal to reduce production and prop up prices. I’m deeply skeptical this deal will stick, and in any case the fundamentals of oil now are against OPEC ever working again. Take a look at how WTI crude prices have regressed to the pre-announcement level already:
American oil producers have adjusted to the lower band of oil prices rather quickly. Note how the rig count is rising again:
Which brings me to Russia. If we really want to hurt the Russians for their hackery, we should encourage a policy of “Drill, Baby, Drill” here at home. The sagacious Mark Mills noted yesterday in “Our Frackers Beat Their Hackers” at RealClearWorld:
The price of oil matters to Russia. Half of Russia’s gross domestic product and more than 70 percent of its export revenues come from selling oil and natural gas. That money not only powers the Russian economy, it is key to that nation’s ability to finance expensive foreign adventurism from the Middle East to Ukraine. Today’s low prices are depriving Russia of more than $150 billion every year; even in Washington, that’s real money. But in equivalent terms, that would be like wiping $1.5 trillion from the U.S. economy. . .
Noting that frackers had single-handedly doubled America’s total oil production, Harold Hamm said: “We can double it again.” This may be the single most frightening set of words Putin saw in 2016. There are no technical or resource constraints to doubling it again. Indeed, while little-noticed in the general media (you can bet Putin’s advisors know), progress in shale tech has doubled cost-efficiency and practically promises a shale 2.0 resurgence — provided regulators don’t stifle the industry. Imagine, quelle horreur, that our government might actually streamline procedures to accelerate a second boom.
So what are we waiting for?
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