Sir,
Vladimir Putin has recently disagreed with Saudi Arabia on limiting the amount of oil to be released to the markets. This has resulted in a global crash in the value of a barrel. The implications were huge with oil dropping by 30% and the share price of global oil producers dropping by similar amounts.
This could be viewed as a dispute or disagreement between the world’s largest oil producers for which the rest of the world has yet to react to and adjust accordingly.
There is though the possibility of a more sinister situation. For the past fifty years the global financial system has been based on the American petrodollar.
Since the great financial crisis of 2008, America and many other developed countries have increased their debt levels by reducing interest rates and printing money. The underlying problems seen in 2008 have not been tackled but only made worse.
Whilst it is true that the US has become self sufficient in oil production due to fracking, the low hanging fruit has been picked and the oil companies have tremendous debt that is required to service diminishing returns. The cost of a barrel of US oil is around $70, whilst Russian is $7 and Saudi Arabia is $3. The debt levels of Saudi mean their oil has to be sold at a much higher price.
So instead of Putin playing draughts, what if he is playing chess?
He sees that the US oil suppliers have high debt and high production costs. He sees that Trump has not ‘drained the swamp’ and reduced the inefficiency and cost of government , but indeed added to it so the US debt level has reached a size that is impossible to service. Along comes coronavirus. The US starts to suffer financial problems in many of its industries as it now has supply side problems, principally from China, and also has demand problems as people are not spending money as they are afraid to travel or go out.
The US stock market was over extended due to money printing and banks are in a precarious situation. A perfect storm is in the making. Add to this problem a plunge in the price of oil and it creates a situation where all traditional actions such as further money printing or rate reductions would be ineffective.
The American bond markets are also flashing red with yields at historic all time lows.
So, is Putin playing draughts and it is a short lived tiff with the Saudis? Or is he playing three dimensional chess and using a concurrence of situations to his advantage?
Before you answer, there are two other facts that should be taken into account.
Russia has been buying large amounts of gold, therefore if Putin wished to, he could back the ruble with gold to form a hard currency petro rouble.
In 1975 whilst at university, Putin’s PhD was on ‘The importance of energy policy for future Russian economic success.’
Respectfully, Mike Jayes
~~~ OOO ~~~
Sir,
Having at one rash time in my long life created, edited and published a needed national magazine I have the fullest admiration for Viv’s stolid determination to create a much needed independent publication embracing truthful reports and open discussion on the political ills and the constitutional dilemma of our nation state. I deliberately refrain from using the word ‘unbiased’ as biased it certainly is towards our great nation which is in direct contrast to the media in general which deliberately ignores our common law constitution that enshrines, encapsulates, expresses and upholds all that we are as a nation state.
One can only greatly admire the excellent construction of Viv’s creation embracing as it does not only the essential issues of law, order and politics but also our culture and heritage which maintain the stabilising cohesion of social order. It was only recently that I was introduced to INDEPENDENCE Daily Newsletter and warmly invited by Viv its courageous Editor to contribute as a fiction writer, an invitation I was proud to accept. And then it got even better as my submissions were met with kind and particularly flattering endorsements from readers. It is of course possible to stimulate any emotion with the written word but to create pleasure for others must be the ultimate in satisfaction for the writer.
In this my short appraisal of INDEPENDENCE is to thank Viv for constructing and captaining the ship that now carries the precious sentiments of those who believe in nationhood and all the good that can emanate from that principle. Long may it continue and its readership expand in the national interest.
Respectfully, Bob Lomas
America has tried to break Putin with economic sanctions now it is Putins turn. Sauce for the goose……..
President Trump is going to take down the (Rothschild) central banks including the Fed, as far as current US debt being racked up to rebuild their unattended infrastructure, why not use their fake fiat currency now, and then reset to Gold, when you’ve repaired what previous administration’s left to dereliction?
Looks to me like that patriotic Christian leader Putin and the God Emporer Trump are having a nice game of 4D chess.
This Coronu crash is probably more helpful to the Patriots than the Mainstream ENEMEDIA would have you believe.
It is after all…Just the Flu.
Trump is a’grifter’ or in British terms a ‘grafter’.
Methinks he will not hesitate to take ANY action necessary to protect the USA from ANY area in the world where he perceives ‘aggression’, military or financial.
We have heard for a number of years that both China and Russian were forming an axis to outdo the ‘petrodollar’ and together have been buying gold to back their enterprise.
Does anyone imagine that America is unaware?
President Trump has been made well aware of the plans both China and Russia have been formulating – simply listen to what Mike Pence has said fairly recently about the machinations of China and all can be understood – they are simply NOT TRUSTED, PERIOD.
Trump has the type of arrogance which responds to attempted ridicule or ‘pis* taking’ and there is no way he will sit back and wait for the China/Russian Axis to ‘take him out’.
My fervent hope is that President Trump and his Team will get another Term and when the chips are down I will be putting my money on the current POTUS.
Mike – the US have been bailing the markets out via the repo market to the tune of over a hundred billion dollars a day, now it’s climbing past two hundred billion. If bond market yields crash so will the stock market, if the oil price crashes so will the stock market and it is too. The FTSE 100 is down over 7% today already, in spite of every country lowering interest rates and printing money, nothing is working.
I can’t help but feel that we’ve reached new levels on insanity, this may take a while to play out but whatever happens it’ll be dire, we common folk will bear the pain and pick up the tab as usual.
How’s Deutsche Bank looking or perhaps HSBC?
The fact is that the 2008 financial disaster has never been solved, just made worse by QE and debt. It now looks as if the financial chickens have come home.
For what its worth I believe that today’s problems will lead to corporate debt failures. This will lead to bank failures which will cause the everything bubble to burst. After that who knows. What is even more concerning is, (ref my article), that if any of the world leaders took the opportunity to play silly devils it could lead to war. Mike
Mike – Saudi Aramco has announced that it received a directive from the Ministry of Energy to increase its maximum sustainable capacity from 12 million barrels per day to 13 MMBD. Saudi Arabia is planning to corner the market share and bring the competition to its knees. This will influence the election results in the USA. Could it be that Saudi Arabia and Russia are working together to bring down Trump?