Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Jim Rickards: Next Financial Panic Will Be the Biggest of All, with Only One Place to Turn… - 20th Jan 18
Macro Trend Changes for Gold in 2018 and Beyond - Empire Club of Canada - 20th Jan 18
Top 5 Trader Information Sources for Timely, Successful Investing - 20th Jan 18
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18
Gold Miners’ Status Updated - 13th Jan 18
Gold And Silver – Review of Annual, Qrtly, Monthly, Weekly Charts. Reality v Sentiment - 13th Jan 18
Gold GLD ETF Update.. Bear Market Reversal Watch - 13th Jan 18
Stock Market Leadership In 2018 To Come From Oil & Gas - 13th Jan 18
Stock Market Primed for a Reversal - 13th Jan 18
Live Trading Webinar: Discover 3 High-Confidence Trade Set-Ups - 13th Jan 18
Optimum Entry Point for Gold and Silver Stocks - 12th Jan 18
Stock Selloffs Great for Gold - 12th Jan 18
These 3 Facts Show Gold Is Set to Surge in 2018 - 12th Jan 18
How China is Locking Up Critical Resources in the US’s Own Backyard - 12th Jan 18
Stock futures are struggling. May reverse Today - 12th Jan 18
Three Surprising Places You See Cryptocurrency - 12th Jan 18
Semi Seconductor Stocks Canary Still Chirping, But He’s Gonna Croak in 2018 - 12th Jan 18
Land Rover Discovery Sport Panoramic Sunroof Questions Answered - 12th Jan 18
Information About Trading With Alpari And Its Advantages - 12th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Oil Price Major Shift Afoot

Commodities / Crude Oil Aug 01, 2014 - 10:16 PM GMT

By: Raul_I_Meijer

Commodities

Oil prices are dropping as Exxon announces a -5.7% plunge in output. And as Shell, as I said yesterday, can think of nothing better to do with its remaining funds than to spend it on share buybacks and dividends. Perhaps shareholders should take the money and run. Because what sort of future can they expect for a company that acts like that?

Western oil companies have tens of billions invested in Russian projects they may or may not have access to anymore now the sanctions are coming into effect. The scourge of insecurity. Never good for industry, never good for markets. Prices will rise again, and a lot, just ask Putin, but that doesn’t take away the insecurity over Big Oil’s chances of – even medium term – survival.


The BLS jobless report came in quite a bit less sunny than hoped and expected (unemployment rose to 6.2%, only 209K jobs created), but it would be good to realize that the importance of the report has fallen substantially lately. There will be many, many people in the finance world who are going to get burned because they don’t acknowledge that, or at least not rapidly enough.

While Janet Yellen can perhaps change course by a few degrees in the face of less than sparkly numbers, it’ll still be steady as she blows. Wages didn’t move one bit, nor did part-time jobs, and Yellen did hint at making those numbers more important, but then again the participation rate squeezed up by 0.1%, so those who want to see silver linings don’t have to look that far. It’s all in the eye of the beholder.

The failure – whether intentional or not – of the Fed’s multi-trillion stimulus is now plain for everyone to see. Yellen is not going to fool anyone with another trillion. The next FMOC meeting may announce a temporary taper hiccup, but what use would it be in the face of the past 5-6 years of not achieving much of anything for Main Street with the printer working both day and night shifts?

It’s of course nice, or funny, or hilarious, to see that while GDP rises 4.0% (well, in the first estimate only), the unemployment rate goes up. Upside down Bizarro.

Still, as I’ve noted repeatedly over the course of the last two weeks, what will drive US financial policy as we move forward has much less to do than before with domestic issues, and much more with global ones. That this will throw Americans in front of the steamroller (even more than before) is being taken for granted, and has been ‘absorbed’ into policy making.

The lure, and the advantages, of forcing the entire planet to fight over, and give up much more than before for, US dollars, have won the day. Undoubtedly not a rash decision, but something that’s been decided behind the curtains way back when everyone was still focused on other things. Like the recovery that never came.

This perhaps becomes easier to understand when you take a good look at that -5.7% fall in Exxon output. And the $110 billion that the shale industry comes up short every single year. What numbers like these spell out is the end of an era, the end of our way of life, perhaps the end of our societies as they exist today.

That end won’t come tomorrow morning, but the combination of rising demand and shrinking supply of fossil fuels points to one single and inescapable conclusion: we will need to divide what’s left, and being the humans that we are, that means we’re going to do the dividing by fighting over it. No prisoners.

And while there will be many physical proxy battles over oil and gas, just watch Ukraine, the first major battles will take place in the financial world. Having everyone and their pet poodle scramble to get hold of your particular currency is a mighty mighty weapon in those financial battles.

There are a numbers of goals in this for the people who’ve taken over, and factually run, America: make sure you get as much of what’s left of the fossil fuels as possible, and make sure others get as little as possible. But also: make sure less of it is used going forward, and store the difference under your own control. That goes both internationally, where you make nations and their citizens poorer so they can afford to buy less fuel, and domestically, where you make Americans themselves poorer so they will drive and heat and cool less.

Making Americans poorer may seem a bit counterintuitive in what is still in name a democracy – how to still get their votes? -, but when you start from the realization that shrinking energy supplies automatically mean a shrinking economy, and an end to the growth model the country is based on, in which at present everything needs to be borrowed because far too little is being produced, it all makes a lot more sense.

There is a major shift afoot, or actually already behind us, and unemployment numbers are now but an immaterial little sideshow the media put on. And no matter how many of those 4.0% GDP growth numbers you see, make no mistake: from now on, the -5.7% Exxon output number is much more important. That’s what will drive US policy going forward.

The taper will continue, far fewer dollars will be available globally and domestically, interest rates will rise, as will unemployment and foreclosures. Oil prices will suffer at first from falling international demand, but with supply falling just as fast not too long from today, we will be looking at $200. And then some.

The more the US fails internally, the more it will chest thump abroad. And with both the reserve currency and the by far largest weapons arsenals, it has extremely powerful tools to thump its chest with. Both at home and abroad.

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2014 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
Raul Ilargi Meijer Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules