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Energy Investing
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Complacency of Generalists.After OPEC + 1 many analysts & the media referred to their decision as " shocking" or "stunning " & then after a while it was ah well they will start to increase production in April. Will they? Can they? Now the headline here has been ' Inflation Shock '. What? Why shock?! Of course major inflation is happening & will increase. Nothing shocking about it. You can't just print money. Historically has never worked. Romans had habit of debasing their gold coins with cheaper metals. Didn't work then, won't work now. The issue imo is how bad or serious is situation relative to benign world order since end of WW2? Since '72/'73 Saudis have by and large done what they were told. Protection for keeping an orderly market was the deal. Look at post 317640 inflation '74 - 12.2%, in '79/'80 it was 13.3% &12.4%. The first result of Saudis taking over control of their oil fields & the second the Iran Crisis. Also was the spike of oil to $147 & the economic crisis a few months later in '07 unrelated? Economic activity begins & must have ENERGY. Cheap energy for past several years has both helped economy & kept inflation down, albeit sustained by losses in the o&g industry, national producers in M.E. & Russia & private investors!! Biden admin. has done three things which imo make absolutely no sense & are as if designed to cripple the Western economies & open the door for China's dominance over next hundred years. 1.Keystone & limiting access to Canadian oil & even forcing Canadians to export their oil & gas probably to China & creating dependency on M.E. & Russia. 2.Continuing to alienate Russia with Nordstream 2, Crimea & G8 instead of pulling Russia into European ambit where it historically, culturally & religiously it belongs & forcing its shift to alliance with China with whom it has never been friendly. 3.Taking righteous approach to Saudis & effectively declaring its desire for regime change against MBS, just as MBS looking increasingly willing to work with, not against Israel. Again turning Saudis, assuming MBS prevails, towards China. Generalists seem to ignore the declared intent of Saudis/MBS that their policy has shifted from maintaining an orderly market to being "unpredictable". Further they ignore that Biden admin. has forced OPEC even more into OPEC + 1, where effectively the "1" will control OPEC. Meanwhile just look this morning at China's latest figures for exports & imports. Higher oil prices leads to higher inflation leads to either currency debasement or stultifying interest rates which leads to social & political unrest or change. You cannot solve a problem with the same attitude that caused it. Nothing shocking about it. It has happened again & again throughout history - no exceptions. |
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Msg # | Subject | Author | Recs | Date Posted |
317690 | Re: Complacency of Generalists. | coolreit | 28 | 3/7/2021 9:10:16 AM |
317693 | Re: Complacency of Generalists. | coolreit | 6 | 3/7/2021 9:35:39 AM |
317696 | Re: Complacency of Generalists. | W | 7 | 3/7/2021 9:47:15 AM |