How far do oil prices have to fall to throttle the US shale boom? – Vox
It appears that the US and Saudi Arabia, that is, the country that supports torture of prisoners and the country that beheads people for not obeying the strictest form of Muslim beliefs and stones women to death for infractions like say, driving a car, are attacking Russia which is a liberal, modern country that has rights for women and no religious persecution. The scheme is to flood the world markets with oil and then cause Putin to be unpopular and then see the Russian flounder and fail and fall apart like when they were led by the very unpopular communist party.
If this scheme is true, there are several facets to it which shows me that it is a failure and will bite the Texans, Canadians, Dakota states and of course the Saudis, in the ass, big time. That is, PUTIIN IS POPULAR. The Russians are no fools.
They won’t blame Putin for all this, they will blame the EU and US. NATO has been extremely provocative in all this, menacing Russia. When a people are menaced militarily and are being butchered like the Russian speakers of Ukraine, the end result is, they pull together and fight back and I believe the consensus in Russia will be to make Putin stronger, not weaker since Russia is now under attack at every level especially the banking levels.
Ah, banks! The US and EU just saw a near total banking collapse recently which was literally papered over by using ZIRP loans from central banks which means ‘print money like mad’. The only thing keeping this wretched banking mess rolling is world trade.
Since China has an interest in keeping both the euro and dollar strong, the bank bail out ‘worked’ in that China bought a tremendous amount of US and EU debts and used this to keep pouring in exports as China madly builds up its domestic economy which is now the biggest on earth. Lest Americans forget: we are no longer the biggest economy on earth!
We ARE the biggest destination for imports and this is destroying our home base rapidly and driving our entire nation very deeply into debt. This absolute flood of red ink is a disaster for the US which is papered over by the fact that China buys our debts to keep this ball rolling.
The gambit the US is using with Saudi Arabia is making China STRONGER, not weaker, and China is in a very friendly relationship with Russia and is talking quietly with Putin and has no desire for the US to destroy Russia.
Chen Lin: Low Oil Prices Fuel Bonanza Increases in Ethanol Stocks | Kitco Commentary interviews Lin:
…there must be another cause for the oil price fall, and suggested significantly reduced buying from China.
CL: No. China’s oil demand has been increasing, and there’s no way the Chinese government can hide it. China is the second-largest oil importer after the U.S. In fact, China’s oil imports have increased by as much as 50% recently because of the price reduction. China is filling up its strategic reserve.
And if the US and Saudi Arabia keeps prices very low for very long, China will suck down a huge amount of this bounty while key US states go into a deep depression, states that are top GOP states and who will not blame Putin for all their future misery but will definitely blame the Democrats.
North American oil production has increased, so if demand stays constant, the Organization of the Petroleum Exporting Countries (OPEC) would have to reduce production to keep the price stable…
I can understand Saudi Arabia getting sick of Canada and the U.S. taking its market share and acting accordingly. Partly because of the American military presence in the Gulf region, those countries cannot squeeze U.S. shale production without American permission…
Another possibility is the U.S. acting to squeeze Vladimir Putin and Russia. The U.S. and the Saudis, acting together in the 1980s, brought the price of oil so low it was a big factor in the collapse of the Soviet Union. I can see the Saudis and the U.S. doing that again. You have Goldman Sachs calling for an oil price crash, and the Saudis are selling aggressively—and selling to the U.S. at much lower price than to Asia and Europe.
Here is some news from Russian media: Russia may ‘automatically’ cut oil output – energy minister
The minister believes individual countries can no longer affect the global oil market.
“In my opinion, such measures, when individual countries agree among themselves, are becoming a thing of the past, as today’s market is completely different. The market is largely influenced by the countries that have large volumes of output and at the same time are importers of oil themselves,” said the minister, specifying that the US is among these countries.
But according to the Russian news media, Russia, Saudi Arabia, Mexico, Venezuela decide not to cut oil production. Then there is poor Norway: they need high price oil markets to keep themselves happy and comfortable. They will be shot down long before Russia.
Oil producers to lose $1tn if price below $60 – Goldman Sachs: The Russian news site examines this issue.
With Brent crude losing 45 percent of its price and trading at $59.9 at 12PM MSK Tuesday, a number of once ambitious projects could become unprofitable. Thus, plans on deep exploration in such challenging regions as the Gulf of Mexico or Arctic may be put at risk, says the Financial Times.
The research based on a $70 oil price was carried out looking at 400 oil and gas fields around the world, many of which are still waiting for a final investment decisions. The analysis, which excludes US shale, shows the fields with the equivalent of 2.3 million barrels a day output by 2020 have now become uneconomic. That figure rises to 7.5 million barrels a day by 2025.
Russian Central Bank hikes key interest rate to 17% to halt ruble roil Slumping ruble should push Russia to ‘live in new reality’ – Bank chief. Hidden from view is the US Federal Reserve, the Bilderberg money printing machine. They are discussing raising interest rates. According to them all, there is inflation (incredible, of course!).
But then, oil is no longer part of the inflation index, is it? By removing food and fuel, this has fueled commodity bubbles that caused a huge amount of inflation as bankers happily flooded the economy with loans that were backed by nearly no savings.
US, European markets tumble following ruble, oil is another problem. Europe’s economy isn’t flourishing. Now time to talk about the EU demands that oil no longer be used at all: global warming! Oops! The EU is committed, but only at the top of society, that consumption of oil and gas must decline by at least 30% to fix the climate and bring on another Ice Age.
So far, there is no open revolt over this little scheme. But as it gets colder and colder as the elites claim falsely that it is really getting hotter and hotter, there will be an open revolt.
Putin, Poroshenko, Merkel, Hollande affirm urgent need for dialogue, ceasefine in Ukraine shows that the crisis there caused by the US CIA operatives, is going to wind down somewhat. Except Poroshenko announced he is going to up military spending using US dollars.
We are bankrolling all this including the Ukraine defaulting on the $17 billion loans the EU and US gave to him.
Pentagon confirms military buildup along Russian borders for ‘peace and stability’ which is a lie, of course. The US has to take down Russia as the major energy exporter to Europe and has succeeded but only to drive Russia into China’s arms.
The effects of this don’t show yet due to the fact, the deals were made this last several months. China will not let Russia’s economy collapse and see the US and EU take over and resume looting Russia. No way in hell especially with these future contracts at risk.
The belief that Russia will collapse and no one will buy Russia’s debts is a false hope since China will do exactly that. Then we must examine the future: CHINA WILL CAUSE OUR CURRENCY TO COLLAPSE!
Yes, China can do this to us. They don’t want to do this…yet. But it lies in the future and there is a 100% chance of this happening if the US continues to encourage Japanese military fascism. The tiny island disputes are an opening shot in all this and the US economy can be easily annihilated the way the US is attempting to wreck Russia.
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Thank you for your analysis.
That stupid Ruble trick I mentioned yesterday has already stopped working. The exchange rate went down to about 77 Rubles/Dollar, and this morning it has bounced back to about 62 Rubles/Dollar. People inside Russia don’t notice these changes unless they buy a lot of imported stuff. (thanks to sanctions, Russia imports less goods than usual)
So, there’s this international exchange rate, which doesn’t matter because the big financial houses won’t exchange them anyway, and there’s the Russian economy, which is essentially unchanged, because Russia is an oil *exporter*, so it doesn’t need to try to buy expensive dollar-based oil.
Not long ago, it was about 30 Rubles/Dollar, but because of the crash in oil prices the Ruble declined. And, remember, a cheap currency is *good* for a country’s economy! (the economists told me so)
Aw, c’mon Elaine. Why do you act surprised at all this craziness from and by the rulers of the USA? Their actual track record on the world stage is one of failure after failure after yet more failures. Yet they maintain the delusional belief that they are the elite of the elite; the best of the best. The top people belong to secret societies like the “Numbskulls and Boneheads”, where they worship the skull of some Indian chief! I wonder if it EVER registers with US elites just how deep the sneering contempt with which they are held by many in the world–including their owners in Israel. Strictly from the elites perspective, I think they should cool it on the sanctions against Russia. Just my own .02.
The fools don’t realize this little trick is what the Chinese plan to play on us! Idiots!
Eventually, China will be the world destination for trade, not the US. The US will be carefully sliced out exactly how we are doing to Russia.
Petruchio,
See, there you go with that pesky logic and reason again.
The US politicians have taken their 30 silver shekels from the 21st Century Pharisees. They’re all quite pleased with themselves. Did you see the smirks on Boehner and McConnell’s faces when they gave Obama & Pals EVERYTHING they could possibly want in that spending bill?!
So they get mocked by us peons. Big deal, from their point of view. (They studiously ignore the mocking of the Israeli power-brokers. Eyes shut, fingers in ears, “la-la-la-la-la.”) Soon America will collapse, and her collapse will collapse the rest of the world’s economy. Russia and China might be able to survive it, but everyone else is toast, because neither Russia or China are really in a position to prop up more than one or two countries each.
But the elites have their high-tech hidey-holes all set to go. The US pols foolishly believe they’ll have a place there for them. Imagine their surprise when they are “grabbed up by an ankle and a wrist, and bodily FLUNG from the top of Olympus.” Not the right bloodlines, you see!
If we could make them see the reality of that, we might have a chance of getting them to start acting in our nation’s best interests again. But I have no earthly idea how to accomplish that. Remember, as I’m sure everyone here is tired of hearing me say, these people are all psychopaths, and see themselves as gods. Don’t believe for a second that the current crop of congressional “leaders” weren’t selected precisely for their psychopathy, as well as for the skeletons in their closets that make them controllable.
Yeah, I know. It’s a big, hairy, stinking mess.
A point of consideration for you all
Russian production costs are calculated and paid for in rubles
Russian sales are, currently, denominated in dollars.
The Russian profits are denominated in rubles.
And Russia always has the option of switching to a gold backed ruble.
Folks who deal in real things like real things. Gold money is real money
RUSSIA IS ONE OF THE TOP HOLDERS OF GOLD. They also produce it.
Here is an interesting article, translated from Russian, explaining part of Putin’s strategy. In Q3 this year Russia bought gold for ALL their USD trade profits. NONE of the USD went into US or IMF bonds.
The funny thing is that the US is suppressing the price of gold to keep the US (paper) Dollar alive, which means gold is super cheap for Russia. The Russians have bought a LOT of cheap gold lately with these artificially strong USD’s, obviously in preparation for the increasingly hotter war and decoupling from the USD markets.
http://www.informationclearinghouse.info/article40407.htm
Ghaddafi and Saddam were both wiped out for trying to switch oil to a gold-backed trading system. Putin is working on that too, but he has nukes and will be much harder to wipe out.
There are Russian oligarchs amongst the 21st Century Pharisees, for sure. However, I’m beginning to suspect that Putin used to be on their team, and is not any longer.
And I think we’re going to start seeing some media types, who’ve awakened to the fact of the Pharisees true agenda, start to speak out. I won’t name any names – yet, but one person has surprised me in the last few days. I’ll keep an eye on them, and see if they keep on speaking raw truth or go back to being a Judas Goat.
@EMS & Christian W.
China
India
Brazil
doing the same. Buying gold, producing gold and holding all the gold they can.
South Africa also produces gold and the platinum group metals ( as does Russia )
Meanwhile:
Belgium and The Netherlands are both retrieving their gold holdings from the NYC Fed, as Germany has attempted to do and France is talking about doing.
If you believe Krugman et. al, gold is an intellectual fallacy and dangerous to Israel if it is held and used by European or New World nations. Should gold be among the assets that Israel hold, then gold is neither dangerous nor intellectually fallacious.
The only response the USA has to the rest of the world going back to a fixed Gold for currency policy is nuclear war and genocide. There being little of value supporting the $ beyond the promises of various self-serving criminals/politicians. Real Power is what people accept as a unit of trade, a store of future value, and an agreeable, consensual pricing intermediary. Paper money requires that the producer and the consumer rely on the honour and morality of the paper money creator to keep the amount created within the levels of the amount of real wealth produced. If the amount of paper money created is greater than the amount of wealth produced, the amount of the paper money produced less than the value in gold of real production is the unearned and undeserved profit stolen by the paper money producer from both the producer and the consumer. If I can get you to arguing who is more damaged the evil producer or the socially justified consumer, the theft will continue from both parties.
Let us then examine the second possibility: The amount of paper money produced is less than the amount of real wealth produced. Ah!!! money will chase the goods and real prices will rise. Keynesian Inflation!!! The best of all slave worlds.
Not exactly.
In the situation where not enough real money is available, options will be created by individuals who need to trade to survive.
Barter is the first option that will appear. It is the first option that always appears. So much of my sugar for so much of your gunpowder. It does not lay claim to efficiency but then failing to create enough money was not efficient either so we do the best we can with what we have until the situation resolves itself.
The second option is that a temporarily acceptable intermediary will be offered: So many ounces of extra soft toilet paper for x your gunpowder or for x amount of their sugar. ( The USA saw this after Katrina when pints of bottled water were currency in some parts of Louisiana.)
The third option is “evil” in that whatever was acceptable in small areas for short periods in the second option scenario becomes acceptable in larger areas and for longer periods of time … eventually the brightly coloured and very collectible old paper money loses its status as legal tender/container of real value and is replaced by whatever worked the best and was also real.
I shall continue:
Consider what happens to a society when the Legal Tender which is the only legal money for settling debts, buying goods, making trades is no longer acceptable to the hoi polloi within a geographic area. Humans have to trade to live.
There might be a section of the geographic world that is autarchic, but there is not one human that is autarchic. The old USSR was the closest to an autarchic geographical area that ever existed and it lacked sources of rubber among other useful stuff.
We have to trade but the only thing that we can legally use to settle our trade differences with is paper promises from criminals/politicians.
Thank whatever deity you follow for the underground market, the gray market, the real goods only market. You want something you have to have something to offer in return. What do you have? You have your labour, you have your assets.
паразиты не получают хлеб
But if you have nothing but your beggar’s bowls you get no bread.
Show the world your sores, your sloth. your ineptitude, your worthlessness and announce that those are your virtuous claim on the world; that the world owes you an existence stolen from the work of others, off the sweat of others, off the brains or muscles or sinews or dreams of others, the world will respond eventually and rationally. The De Medici family invented double entry accounting and made the world we know today possible; inevitably double entry accounting means that the stolen goods must be paid for.
Legal Tender laws are designed to steal wealth from the productive and give that wealth to criminals; some to distribute to their thralls but most to keep for themselves. So trade stuff for stuff and forget $$$. Anything is worth to you exactly what it will do for you and not a shekel more nor a sous less.
As you are able, trade paper for real, trade pol’s promises for things that you can fix or use or trade.
Life is not always simple but living can be simplified and made more profitable per unit of time; and the only real asset you have is the amount of time you have between now and the grave. Spend it well or piss it up a stump it is ALWAYS and ONLY your choice.
We can ask the Russian people for expert advice on post-crash barter trading for survival. They’ve been there and done that.
EXACTLY. Thanks, everyone for input.
Russians are the ultimate survivalists. The weak were destroyed when the EU and US looted the place under Yeltsin.
The people there are not easily spooked. Meanwhile, Europe is going into full collapse but is still propped up by US dollar printing which is why a bag of groceries that cost $20 ten years ago here in the US now costs $50.
Most Americans are pleased that oil prices are dropping! And wish this would continue.
And to hell with the derivatives dealers, most of us really hate them.
And YES, Russia is a huge ‘gold hoarding’ state as is CHINA. Both also have very big sovereign wealth funds.
The US has NOTHING.
Isn’t it in China’s interest to see Russia collapse? Russians might like to make trade deals with China but Russians wouldn’t like Chinese immigration even at modest levels. And China eventually will want to use Siberia for settlement and development since the Eurocentric western Russians don’t seem to be moving there in great numbers anyway but there is already Chinese population pressure on border settlements.
If China pretends to join a Russian alliance China would benefit greatly when western push came to shove to toss Russia to the NATO wolves and say look see its the west we really love. Then China buys more time for its own long game.
Easy to understand: RUSSIA HAS NUKES.
Very dangerous to invade. China is menaced by the US, not Russia. The US has made it crystal clear, we support Japanese imperialist fascism aimed directly at China’s front door.
China has not done anything much about this because this is something they intended to do in another 20 years, not now.
But ‘Now’ comes tomorrow if the US pushes too hard.
The US has a kind of VAT on all world trade done in USD. That is a lot of money.
That is what the fight in Russia is about. The Russian Central Bank is NOT INDEPENDENT or even fully controlled by the Russian government. The Russian Central Bank, as part of the new neoliberal system imposed on Russia under Yeltsin, was taken over by ‘private interests’ (it is obviously secret who the private owners are but it’s not too hard to guess is it) and chained to the IMF and US/UK financial markets. Moreover, the new private central bank system was protected with fortress like strength in the Russian Constitution. This system has a lot of Russian inside protectors (who profit from it) despite the RCB not being allowed to stimulate Russian economy directly.
This ball and chain system, designed to cripple Russia and feed it’s profits into western coffers, makes it very hard for Putin to maneuver freely but it looks like he found a way out of the trap with the gold trade arrangement. No wonder the US/UK elites and the bankers are pissed off.
China need do nothing but keep out of the way of the US and protect itself from American attempts at infiltration. The US will destroy itself all by it’s own machinations. All China has to do is to keep out of the firing line, look to it’s own house, and be ready to pick up the pieces once the US implodes from it’s policies based on hubris, greed and overreach.
The current situation with Russia as the target must suit China fine. They will prop up Russia when/if needed and in the mean time enjoy cheap gas and now cheap Saudi oil, while the US flails madly at Russia. If the US gains control over Russia again China will not stand, and the Chinese know this very well. Also, the Chinese have the horror example of Yeltsin Russia to show them what happens if they let Washington, Wall Street and the City run the show.
Pepe Escobar had an interesting article the other day. He wrote:
“November 18, 2014: it’s a day that should live forever in history. On that day, in the city of Yiwu in China’s Zhejiang province, 300 kilometers south of Shanghai, the first train carrying 82 containers of export goods weighing more than 1,000 tons left a massive warehouse complex heading for Madrid. It arrived on December 9th.
Welcome to the new trans-Eurasia choo-choo train. At over 13,000 kilometers, it will regularly traverse the longest freight train route in the world, 40% farther than the legendary Trans-Siberian Railway. Its cargo will cross China from East to West, then Kazakhstan, Russia, Belarus, Poland, Germany, France, and finally Spain.”
http://www.informationclearinghouse.info/article40487.htm
You can see why the US is desperate to split off Europe from Russia and China. All that trade outside of the USD markets = no free profits for the US.
The US is upping its nuclear warhead missile systems to attack CHINA. China knows this.
They also know that the US cannot attack China if Russia can retaliate.
I know the Chinese personally very well. I know they are NOT STUPID. At all.
Ahem.
They read the tea leaves. They know the State Department, the Bilderberg gang, all the top US leaders know perfectly well what the 50 Year Plan is because I TOLD THEM ALL>
Yes, long, long ago. I even had a meeting with the Secret Service in my living room in New Jersey to discuss this information.
The Chinese know that all our leaders know this information. They are playing a very hard game here and are mainly making all the scores.
Japan is dying. The US cannot believe this. Japan will last about 5 minutes into WWIII. Then vanish forever.
The US refuses to believe this fact.
The US belief that we can ‘win’ WWIII may be true but NO ONE IN EUROPE nor Japan will survive. At all.
They will all be annihilated. Easy to understand how: bomb all the nuclear power plants.
Sigh. Poison the wells for good. Japan and Ukraine are 50% there already.
Yes, the Chinese are no fools. They have no interest in doing another round of being exploited by western elites like the Opium Wars and the resulting disastrous century and more for China. China is still recovering from that.
China is also very angry about the Europeans AND the Japanese invading Beijing back then.
They smile because they want to do business but underneath this is a lot of plotting going on.
Instead of tinkering with the nuclear weapons, the USA and Europe and Japan should be safely removing spent fuel from their NPPs, and storing them somewhere safe, preferably deep underground, such as in a granite formation.
Somewhere like that Onkalo project in Finland.