I bring you terrible news.
Oil prices have plunged to the point where it hasn’t been this cheap to fill up your gas tank in over a decade. Businesses that count energy as an input cost will be forced to figure out what to do with the excess capital they’re not spending on fuel.
Speaking of excess capital, American corporations are struggling under the burden of enormous piles of cash they don’t have a use for. Each day they must choose between shrinking their floats or handing money back to shareholders in the form of record dividends.
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American politicians all know that we are doomed, thanks to competition from China, which has both a cratering stock market and a sinking currency. It is clear that we will never be able to compete with our largest economic counterpart, thanks to their rapidly decelerating economic growth and declining ability to throw more debt at their malaise. This is clearly shaping up to be the Chinese Century. I have no idea how we’ll ever keep up.
Down in Washington, a devastating development is now underway. The Federal Reserve is considering its first rate hike in nine years. Unfortunately, the emergency conditions that have kept interest rates low are no longer present. We are pushing dangerously close to full employment and, lamentably, our banking system no longer requires an IV drip of artificial support. Overnight borrowing costs may skyrocket by one-quarter of 1% if things continue to improve.
