Math Is Money Is Physical Oil

Crude oil prices are being slammed again today, as the “dollar” continues to reek about the places where economy and finance come together. Crude oil is perhaps the most visible extension of that process, where finance helps figure out direction of prices that will eventually be necessary to physically clear (even and especially to storage) actual product. Given the position of energy in the actual economy, the centrality of it all leaves behind understatement.

Despite all protestation that has continued about the state of the “transitory” risks, the “dollar” has been dead certain about where all this was going. While economists continue to contribute to the myth about QE and “stimulus”, the “dollar” was both unimpressed and equally overwhelming. In some ways, it is a self-fulfilling mention as “dollar” characteristics become “real” in various facets of the real economy, far beyond just the domestic shores of what was once the dollar.

Even Europe, with all its 2015 QE newness, is tracing out so far exactly that financial path. The year started fairly poorly, unleashed Draghi’s long-restrained imagination, and seemed to be heading quite as intended – but only to be dashed yet again on this side of summer. While that “something” may elude the understanding of limited (and limiting) central bankers, it is nothing more than the “dollar” and its waves working in all things such as crude oil.

Euro-area economic growth unexpectedly slowed in the third quarter, underscoring the vulnerability of the region’s recovery as the European Central Bank examines the need for fresh stimulus…

With a slowdown in emerging markets testing the strength of the pick up in the currency union, the data will provide ECB President Mario Draghi with more visibility heading into December’s monetary policy meeting. The central banker has signaled additional stimulus is in the pipeline, citing renewed downside risks for growth and the region’s inflation outlook, which risks becoming entrenched well below the ECB’s goal of 2 percent.