The Federal Reserve has been attacking inflation. The problem is that after printing trillions of dollars, they’re ill-equipped to succeed at their task. Partly, this is because all that cash has to go somewhere and partly this is because their mandate does not extend into ensuring that global energy production expands.
The problem is that the only ways to reduce the price of oil are to produce more of it or consume less of it.
It’s hard to produce more when the President and many of his powerful oligarch buddies are aggressively intervening to ensure that it’s difficult to expand or finance production. Meanwhile, no one wants to invest when there are constant threats of excess profits taxes, carbon taxes, expropriation and price caps. Since the obvious solution has been made so impossible, the Fed has been forced to embark on a plan to reduce global energy consumption.
How do you reduce oil consumption?? Well, it seems that their plan is to create a global depression.
So, after a decade of paying lip-service to “inclusive economics” and “closing the wealth gap,” the Fed has been forced to pivot and destroy the finances of the world’s poor, in the hopes that they’ll consume less oil.
The Fed is now well on its way towards creating an economic crisis that will reduce global energy consumption—consequences be damned.
No one knows how big the cuts will be and frankly, it doesn’t matter how large they are. Instead, the message is clear—the Fed can crash global GDP in their fight against oil, but OPEC wields a much larger stick and will cut production even faster.
In fact, OPEC will DO WHATEVER IT TAKES if the Fed continues on this path. OPEC has drawn a line under the price of oil and told the Fed that it’s wasting its time. OPEC controls the price of oil and oil is the world’s Central Banker, not the Fed.
On Monday morning, the market heard that message loud and clear. The Fed is trapped, oil is going higher, and the Fed is powerless to contain it. Why would the Fed continue trying to blow up the world’s financial markets if oil will not bend to their will??
Of course, the Fed could destroy enough global GDP to erase 4.5 million bbl/d of global oil demand and stop the price from exploding, but OPEC just told them that they’ll DO WHATEVER IT TAKES. Do you think the Fed continues its war on GDP when they now know they’ll fail to contain the price of oil??
Let’s be clear about what happened:
1. Biden destroyed America's oil/gas industry and made us dependent on OPEC again.
2. Biden begged OPEC to produce more oil.
3. OPEC is doing the opposite—cutting output by 2 million barrels a day.
Total failure. OPEC is laughing at him.
1 comment:
I'm surprised at the Lord's long suffering delaying his wrath with the USA. It appears to be coming to a crashing and resoundingfinale in multiple big ways. Dividing Israel, transgendered derangment, murder in the womb of babies, gay marriage and multiple other atrocities. America is now a nation where is good is considered evil and evil is praised by our leaders. The rapture can't be that far off when we are starring down the barrel of a nuclear Russia. I don't think the guy is bluffing. I really liked Terry James article on US citizens being clueless regarding this very real possibility. We are not impervious to this potential disaster. Pray, pray pray.
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