OPEC was from day one, a cartel. Like all cartels, they made lots of money at first. But over time, everyone under the sun began competing because prices were artificially high and this lead to the inevitable gluts and sudden price collapses. The only tool to fix this for the Saudis and Texans was to generate wars against energy producers and boycotts like the one against Iran. This has now failed utterly. Also, rich bankers cooked up a stupid commodity futures scam called ‘derivatives’ which originally was only for wheat and corn, betting on the weather. Now, it is everywhere and utterly toxic and extremely prone to create price bubbles and collapses. This stupid market always goes rapidly to infinity and infinity is the bane of humans because it always ends with nothing instead of everything.
I have written extensively about all this and here are some past examples. The present situation is due to the very same causes as past deflation events: Infinite Money Kills Real Wealth | Culture of Life News
ΩΩInstead of a new model, all sorts of goofy tricks have been introduced to explain away this obvious proof that the universe is not expanding, it is collapsing. Eventually the new model will emerge but only after enough astronomers literally die off so that younger upstarts can finally ask the proper questions (and thus, eventually answer them with new theories).
ΩΩThis is happening in economic matters. The Marxist/Capitalist model began to actively collapse with the triumph of communist rebellions which showed the weaknesses of Marxism. The triumph of capitalism in Marxist countries has led to the collapse of capitalism in the non-communist countries and the only people able to figure out that capitalism has collapsed has been the new capitalist communists.
ΩΩThe ideology about the Great Depression of the mid-20th century was, protectionism created this event. So insidiously, the elites in the capitalist West worked nonstop to eliminate trade barriers and this was elegantly exploited by the new capitalist communists. We then had a global banking collapse nearly identical to the one in 1930 and this proved that the ideology of ‘trade barriers create depressions’ to be false.
ΩΩInstead of realizing free trade makes global banking collapses inevitable still isn’t the new ideology. The old one which totally misreads how and why depressions happens continues unabated in power in our universities and our government. Not one soul seems to have grasped that the economic model they are using is totally useless. Worse than useless, actively destructive.
The US merrily shipped most of our production and jobs overseas. We still do this, Obama has spent the last year going around the planet, making this even easier than before. The rich get richer and tax cuts and own Congress while the GOP screams about Obama not creating jobs. Well, the theory is, if we open up more trade, we get more jobs. After losing many millions of jobs with Free Trade, I would think someone would figure out, this is a stupid plan! But no, we had a ‘debate’ in the GOP last night and as always, they are more upset with gays kissing and teens getting abortions instead of appearing on Teen Mom with a baby in tow! Yup, anyways, INFLATION is now taking off in her usual leisurely way and has spread her gossamer wings to the rising winds of ZIRP interest rates to bankers. This is a problem, too, never discussed realistically.
Finances and astronomy are hand in glove thinking: it is all about infinity and zero! Motion, time and space are given numbers and rules and humans then try to riddle out what the Sphinx is telling us: mortality. The excitement about where we are going and where is the center of the universe are real questions humans cannot answer since we really, emotionally think that we are the center of the universe if not our own galaxy or solar system.
Some people like to think that Goldman Sachs and other gnome operations love to have depressions. They don’t, actually. They love the bubbly. They love lots of fizz. They grimly hang on and enjoy cheaper prices in depressions but they are not happy with these, they want infinity, not sloshing along picking up pennies in the gutter. Commodity markets are viewed as a desperate, last chance for money operation. This is due to it being stubbornly physical.
This is why the carbon CO2 trade business made them all hysterically happy. It was an invisible gas! And it was everywhere and nearly everything produces it! Whoopee! They even enthused that this could lead to infinite derivative deals. Then, it got too cold, too many people got too angry about high energy taxes and it has fizzled badly. So, back to buying gold and then trying to swindle someone down the line in desperate, dirty gold market deals.
Goldman Sachs couldn’t manipulate this market nearly as well as they do say, the derivatives market. They love derivatives, they hold their noses to do gold. And now, they are out of the gold since they have no profits to park there, temporarily. So gold drops like a rock. Oil, on the other hand, depends on wars. If we attack an oil producing nation like Iraq or Libya, the price of oil soars. Now that these wars are winding down, it is back to preventing Iran from selling oil. This pleases Saudi Arabia which is desperate for higher prices for oil. And it pleases the big gnomes playing the oil futures markets.
Alas, high oil prices=economic recession in the US. So, I expect this to worsen, not get better any time soon.
And so much for the past! The price of oil finally reached its saturation moment when even the most marginal processes and systems were profitable and now it has collapsed and this is bringing lower energy costs which is in the whole, very good for most of us consumers but bad for energy producers like the US, Russia, Saudi Arabia, etc. On the other hand, this makes manufacturing powers like CHINA and even Japan, better off! Since the US has offshored its manufacturing and has relied on food and fuel exports, this will make things worse for our trade deficit.
Duh! We used to be the world’s #1 manufacturing power. All tossed into the crapper by the bankers and politicians who wanted cheap foreign labor and big profits with zero interaction with irritable workers going on strike for better wages.
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