Chess, what a game. Move, counter-move, counter-counter-move, etc. Todays game is being played in the world of oil production. Putin has been successfully jacking up the price of oil to pay for his countrys social safety net by saber rattling thereby scaring some people into worrying that supply will be scarce so they bid the price up on what is available. Now that Canada supplies us with a few million barrels a day and our frackers added another million along with a few million conserved, the Saudis are left with only a global market of nations who are broke ass poor and cant afford $100 a barrel. What to do? Increase the global supply of oil into a glut. Its now $45 a barrel and likely to fall further. Not one oil producer is blinking in this game of chicken. Everyone has the pumps going full tilt. The end game is the Saudis forcing both frackers and Canada into ceasing their pumping and our frackers defaulting on $400 billion in loans. Same problem that Russia has so Putin has GIVEN his oil buddy BILLIONS in $$ to make the current debt payments (actually the transaction went thru the back door at Russias Central Bank via a currency swap of rubles into $$ at a rate of 40 rubles to the $$ at a time when a ruble was trading at 70 to the $$). I hope that the US government does approximately the same thing for the frackers and lets the Federal Reserve do some Quantitative Easing by buying their debt so the frackers can stay in business and keep the rest of the louts honest. In the meantime, Im enjoying $2.50 a gallon gas, the prospect of a decent economic recovery, and the prospect that Iran ,Russia, Venezuela, and the Koch brothers have so little free cash that their friggin shenanigans become relegated to the dust bin of history.
Posted on: Tue, 13 Jan 2015 10:04:58 +0000
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