ZIRP, oil, frakking and dislocations.

The previous article reiterates points I have made myself:

1. Inflation has happened, but the inflation was channeled largely into the Stock Market and real estate values;
2. While, ZIRP has saved American banks, it did not create jobs;
3. The economic recovery is slow and uneven;
4. Because of the effect on stocks, the upper half is better off and the lower half is worse off
5. The US economy was saved by the lowering of the oil price and increased US oil production.

Where do we go from here?

1. Frakking is threatened by low oil prices.

The Saudis tried to undermine American oil production by supporting anti-frakking propaganda. This did not work. However, frakking requires about 4-5% of our water supply which puts a strain on the water supply. Also, frakking is expensive. The Saudis then dropped the oil price by increasing production. THIS threatens America's oil production.

2. China vs Saudi Arabia. Oil side effect.

China benefits greatly by the lower oil prices. In turn, China is supplying the Saudis with the infrastructure needed for renewable energy production. For now, this means more solar power, but I expect the Saudis to increase emphasis on atomic power. That will tie together not only China and the Saudis, but also the Russians. The Saudis are rightfully worried about Iran acquiring nukes.

3. China needs to stabilize its external policies.

The chief obstacle is the Spratley Island claims and relations with Japan. Expect China to make an agreement with Vietnam and the Philippines to divvy up profits from the oil around the Spratleys.

4. US turmoil will increase.

If the Republicans take the Senate, it will not normalize events in this country. Barak Hussein will still be President and his judiciary appointments and the Media will insist on preserving US moves toward Social Democracy. Blacks are getting restless, but they lack the knowledge to identify what ails them. As a consequence, they support the very forces that keep them ignorant and poor. They are played for the fools that they are. Rioting and looting when black criminals are shot by the police is designed by Democrats to keep blacks motivated to vote. Unfortunately, it will not produce the improvements they need. Racial agitation will continue.

5. US economy will grow. BUT! The increasing automation and use of robotics will reduce job growth. The govt and the FED will continue to force misallocation of capital.