"Most people believe that most oil in the world is produced by the big oil companies, the Exxons, the Shells, the BPs, the Totals of the world... That is not true. Most oil in the world is produced by national oil companies.”
The prevalence of crude is undeniable. You might dabble in green-think cultism or you might drive an obnoxious monolith of a Hummer (what I like to call an “overcompensation-mobile”), but neither philosophy of consumption dares to contradict that this world runs on oil. Petroleum is used in the manufacture or shipping of almost every industrial product on the planet, and even many agricultural goods. Therefore, it behooves the public to seriously consider the ramifications of oil price and its underlying effect on the entirety of our economy. Even minor increases holding over an extended period of time cause economic reverberations that can be felt for years afterwards. Financial and social adjustments to commodity inflation can sometimes take decades if the event is historically unprecedented. Petroleum is a foundation ingredient, it is energy itself; the higher its cost, the greater the cost of every other product we use, and the worse off our financial structure is. Period. There is no scenario yet experienced by any nation in which oil inflation actually benefited the masses or the overall economy, even in countries that sell oil! Americans have had a small taste of the tensions involved in an oil crisis, during the 1979-1980 Iranian snafu, and the massive gas spike of 2008, but these events are nothing compared to the steamrolling inflation we are soon to see at the pump in the next couple of years. Let’s examine why…
Merkel Points to `Serious’ Bailout Risk as Spanish Bonds Drop, Reggie Middleton says “Ya Damn Skippy” – Here’s How We Called ItSubmitted by Reggie Middleton on 11/23/2010 17:24 -0500
Contagion in the Europe is a foregone conclusion and its risk cannot be truly priced in since no one really knows where it will kick off, how, and what direction it will take through which channels. All that is known for sure is that you have a collective of nations that have been purposely over-optimistic in forecasts, purposely misleading regarding their past and present liabilities and mired in debt and bad assets amid an inevitable hard landing - or worse.
Erin Gone Broken Bank: The 2nd EMU Nation That Didn’t Need a Bailout Get’s Bailed Out Within Months, Next Up???Submitted by Reggie Middleton on 11/22/2010 08:24 -0500
Exactly was we predicted in the beginning of the year, Ireland is the 2nd Euro nation that didn't need a bailout to get bailed out! Now that some may start taking this seriously, I go through a quick history of how we got to this point and prep for an intense analysis of how the contagion will unfold, how ugly the haircuts (that nobody needs, of course) will get, and who may be the next domino to fall.
It's been exactly one year since I wrote about an exciting but controversial treatment for Multiple Sclerosis (MS), called the Liberation treatment. A lot has happened in a year, and I think it's important to share some of my thoughts with you. Please feel free to relay the information back to anyone you know who has MS.
As I peer through the fog and attempt to see visions of things to be, I see nothing but pain ahead. Anyone who can look at the following chart and not conclude that there is much pain ahead for this country is either a Goldman Sachs banker, a Federal Reserve Governor, or a bought off politician in Washington DC. It is no coincidence that after Richard Nixon closed the gold window in 1971 and allowed the Federal Reserve to “manage” our economy that total debt outstanding in the US surged from $2 trillion to over $50 trillion. GDP has risen by 1,300% since 1971, while total US debt has risen by 2,600%. Now for the kicker. Real GDP has only gone up by 292% since 1971. This means that 1,000% of the increase in GDP was from Federal Reserve created inflation. Over this same time frame, real wages have declined by 6%, from $318 per week in 1971 to $299 per week today. Inflation has been the American drug of choice to commit suicide over the last 40 years. It is stealthy, seemingly painless, and deadly. Inflation is the “painless” method through which the Federal Reserve has decided this country will commit suicide.
As oil sees its image tarnished from the disastrous oil spills that took place off the coast of the Gulf of Mexico and off the coast of Dalian, China, and as the most promising oil fields remain off limit to the Western oil majors, gas is gaining in popularity. Gas is present in large quantities and in many countries of less questionable reputation such as in the United States and is also less harmful to the environment than oil. Though gas is not intended to replace oil, some gas-rich countries such as Russia and Iran are strongly advocating for a gas cartel to regulate the industry, which can explain the reluctance of Russia to adopt sanctions towards Iran at the United Nations as both countries heavily rely on the income generated by their natural resources.
Sources in the Gulf region report that Iran is preparing for a possible attack by Israel and/or the United States on one or more of its nuclear production units by stockpiling arms and munitions with its proxy militias in Kuwait and Bahrain. This comes as Bahrain arrests 23 opposition leaders accused of terrorism offenses and hints that Iran is behind an alleged plot to overthrow the government. Bahrain's attempted coup reports should be taken seriously, as Iran knows that its best chance of fighting the US and/or Israel is by proxy. Hitting Bahrain hard would greatly upset the overall security situation in the Middle East and Gulf region.
A number of different chemists are finding elevated levels of toxic hydrocarbons in the bloodstream of Gulf coast residents who don't even work on the water ...
I Suggest Those That Dislike Hearing “I Told You So” Divest from Western and Southern European Debt, It’ll Get Worse Before It Get’s Better!Submitted by Reggie Middleton on 08/27/2010 05:36 -0500
So, S&P finally gets around to Cutting Ireland’s Rating on the Cost of Bank Support, and of course Irish officials balk... Let's drill down into the facts.
Greek Recession Deeper Than Forecast, or Another Vindication of Independent Proprietary Analysis Over Government Propaganda?Submitted by Reggie Middleton on 08/13/2010 05:40 -0500
Second-quarter GDP in Greece estimated to have fallen by 3.5% year-on-year. I'd like to bring to your attention that this is a pace that is over 11.5x WORSE than the projections that Greece used to get the austerity package-based bailout!!! It is also much more in line with what we anticipated at the research group of BoomBustBlog. Anybody want dibs on whether we are also more accurate about the point of Greece's restructuring causing a contagion effect?
A video being hosted by Iranian FarsNews Agency (google translated here) shows mass graves that have been dug in the province of Khuzestan (located closest to Iraq and Kuwait) that are destined for Iranian "aggressors." It appears Iran is actively preparing, at least in the form of TV propaganda, for what at least from its own perspective, is response to an invasion. If any of our readers have a better proficiency with Farsi, we would be curious to understand what the Imam says in the beginning of the video, although based on the context we have a vague idea.
Here’s More Proof of the Sheer Lunacy of the European Bank Stress Tests: Passed Banks are Already Trying to Collect on Defaulted Claims of European NationsSubmitted by Reggie Middleton on 07/27/2010 12:32 -0500
European banks are already struggling to collect from fellow defaulted, sovereign (allegedly) backed banks yet we are hearing that there is no need to model in default or restructuring in the European bank stress tests. Of Iceland, Greece, Portugal, Ireland and soon Hungary are all just one-off occurrences.
All of a sudden, the world wants to buy this company while there is blood in the street and oil on the water. Sovereign buyers from China to Singapore to Saudi Arabia have been lining up. That well known value stock player, Libya, is in play. Cap that sucker, and the next stop is $40 or more.
Greece Starts to Restructure in Real Time, Exactly As We Predicted - Rendering EU Stress Tests As Credible As Platinum Laced Frog FartsSubmitted by Reggie Middleton on 07/07/2010 11:30 -0500
I've written blog posts calling government officials liars when they said the Greek crisis was over, written posts calling for inevitable haircuts while the bulls said the Greek crisis was overblown, and even put up with BS EU stress tests that won't even account for the possibility of default - or its economic cousin, restructuring. Well, how ironic that the EU puts out the criteria for its banks stress tests sans default/restructuring scenarios today, the same day that Greece releases a press release of a broad restructuring of its hospital debt. Hmmmm.... As realistic as platinum frog farts!