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As China 'Buys Low' To Build SPR, Washington Forced To Sell Strategic Crude To Meet Budget
The signs of regime change are everywhere. From embarrassment by Russia's success in Syria to China's creation of its own 'World Bank' and SWIFT alternative, the trend of de-empirization are growing, but tonight's news that Washington will sell oil from its strategic reserve in order to meet budget constraints and avoid default (as China takes advantage of low prices to build its own reserves) is simply stunning in its analogy of the shifting world order.
Bipartisan congressional leaders and the White House struck a major fiscal deal in principle Monday that would raise the debt ceiling and lift budget caps on both defense and domestic programs, according to congressional sources familiar with the deal.
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This deal would avoid a potential debt default on November 3, and it would reduce the chances of a government shutdown on December 11.
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The deal includes $80 billion in increased defense and domestic spending over two years, a senior House source told CNN.
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That new spending would be offset by sales from the strategic petroleum oil reserve, use of public airwaves for telecommunications companies and changes to the crop insurance program — among other measures. Moreover, the deal would spread out increases in Medicare premiums over time so beneficiaries don't feel them acutely. It would also aim to preserve the Social Security disability trust fund, sources said.
Conservatives sharply panned the deal.
"It's emblematic of five years of failed leadership," said Rep. Justin Amash, R-Michigan.
So, to summarize, 'Murica - the world's reserve currency superpower and "cleanest dirty sheet in a brothel" economy is about to sell its "strategic" petroleum reserves at multi-year low prices in order to meet an ever-expanding welfare state's needs...
As China "buys low" adding to its reserves amid the multi-year low prices...
* * *
Of course this move by The US is echoing what many Petrodollar States are being forced to do to (sell 'reserves' to meet social welfare needs); however, in this case, it is not some massively indebted banana republic, but The Unites States of America (oh wait!).
* * *
As we recently pointed out, there are two general schools of thought amongst noted contrarians and libertarians regarding China’s overriding objectives.
One school has it that China is very much a part of the One World Government philosophy and their primary goal is to acquire a more powerful seat at the IMF. Having done so, they will settle in and be content to be one of the leading jurisdictions that run the world collectively.
The other school suggests that China means to become the most powerful nation in the world - to replace the US in every way as the world’s dominant nation.
My own appraisal is a combination of the two. China’s behaviour - not only their public stance, but their massive economic infrastructural development efforts indicate to me that they intend to go full-bore with their new economic infrastructure, giving them powers that rival and even overtake the EU and US. At that point, they will be unconcerned as to whether they will be welcomed into the “club” that is presently dominated by the EU and US. They will be an unstoppable freight train passing through town. The western world can either get on board, or fall by the wayside. The Chinese will prefer the former, as it would be more profitable and would avoid conflicts (both military and economic), but they will not be deterred.
At this moment in time, we’re observing a part of that effort. The old structure is being slowly bulldozed and a new structure is underway. It’s very likely that, in order to assure its success, it will be a better one - one which offers its users greater freedom. We can be certain that, like all governmental constructs, it will eventually become corrupted and be just as oppressive as the one it hopes to replace. However, in its early years (and hopefully beyond that) the people of the world will enjoy a period of increased economic freedom.
Some time ago, when we first predicted that China would create such a system, it seemed almost a fairy tale - a highly unlikely development. Yet, China has gotten there even faster than I’d expected. Let’s hope that the day when its benefits trickle down to the street level, worldwide, will also arrive more quickly than we had expected.
Charts: Bloomberg
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Remember those dates 11-3 and 11-5 on The Ecnonomist Mag? Something big could be up.....just sayin.
http://vigilantcitizen.com/vigilantreport/economist-2015-cover-filled-cr...
Sublimal messages, Grave Stones for each hemisphere, using numbers to make intelligent decisions...all sorcery bored rich kid BS. Private schools, nannies, nurses, seeing Mommy and Daddy on holidays...Spoiled brats with psychopathic tendencies.
https://www.youtube.com/watch?v=xeXqtzusIU0
CCR - I'll put a Spell on YOU (Common enemy unites the world against the bankers)
We filled that SPR with $140/bbl oil. It's ony fitting that the government would sell it for $40/bbl.
So let's see if I've got this right,,,,
Back in May of 2015 former CIA Director Micheal Morrel predicted at 70% chance of war with China...
http://www.cnn.com/videos/tv/2015/05/20/erin-intv-mike-morrell-south-chi...
And with ships heading off to a South China Sea pissing contest some genius thinks it's a good time to pull the plug on the strategic reserve.
Brilliant.
It's BULLSHIT.
They aren't dumping crude into this oversaturated market for small change -and small change is all they would get in comparison to the outrageous spending levels being sustained.
This is a cover story for shipping a fuck-ton of fuel off to carrier groups and/or ground troops -either US .MIL or proxies.
-Probably a lot of hardware and pack getting wrapped to move, too. Supply ships move in convoys, so a whole kit is being deployed.
Something is about to get lit.
It is interesting timing considering that the US seems to be trying to bait China into a Pearl Harbor or a Gulf of Tonkin incident. There are plenty of WWII parallels really. Don't be surprised if we wake up one morning and Guam is a reef. Just like Pearl Harbor the Island will be surprised but the administration and the rest of the apparatus will not be because they have been trying to light a fire for a while now.
Welcome to the mind screw.
Stick around....we think you're really gonna like this.
"... tonight's news that Washington will sell oil from its strategic reserve in order to meet budget constraints and avoid default ..."
If you like your oil reserve, you can keep your oil reserve.
What difference does it make at this point, since they print them anyway.
Paging Gordon Brown.
Just as Operation "Trident Junction" NATO's largest military exercise in over a decade (30 nations 37,000 troops) ends on November 6th ...
http://www.newvision.co.ug/news/674066-nato-launches-biggest-military-ex...
And of course a big one in South Africa ends on November 5th...
http://www.bbc.com/news/world-africa-34570755
I thought the Strategic Oil Reserve was for that, strategic inititatives. Never knew it was a government cost center that could be liquidated for revenue. Who knew?
Looks like everything is going according to Obama's plan...
not his plan but yes he is happily onboard
Just remember, this is all theatre. Doesn't mean it won't hit the fan, on the contrary, it definitely will. But none of this is an accident or coincidence. All scripted. Lots of head fakes to desensitize the public for the real deal. Like a boxing match; jab, jab, fake, jab, fake....WHAM!!
Excellent analogy.
I trust the "WHAM!!" was the ref with the basball bat...
It wasn't a plan.
It was “Change We Can Believe In”
Moar of his slogans...
* “Forward” — official slogan
* “Greater Together” — youth vote initiative
* “Betting on America” — his new bus tour
* “We Don’t Quit” — speech theme
* “Winning the Future” — from 2011 State of the Union address
* “We Can’t Wait” — theme tied to executive orders/GOP obstruction
* “An America/Economy Built to Last” — from 2012 State of the Union
* “A Fair Shot” — speech theme
He forgot Beyonce's "Who Run The World? Girls"
https://www.washingtonpost.com/blogs/the-fix/post/president-obama-a-man-...
I was in China yesterday and was impressed with the infrastructure. Compared to the PEK airport - DC's Reagan airport looks like a shithole.
People seemed nice and very friendly - lots of good looking girls. Generally they seemed much happier than Americans. I finally understand why lots of Chinese have been leaving western countries for about adecade.
+1 Killdo. I have travelled a bit in Asia and world, US infrastructure is a shithole now. Americans that think America is the undisputed leader are sadly mistaken.
I understand the infrastructure in all those empty office buildings, condo towers and shopping malls is excellent too.
Chinese have stolen all the technology they have, just what are they going to steal from a broke USA. If we are done they are done. Well maybe they can steal from the Africans.
The Chinese learned and it may have included stealing for which they certainly do not have a monopoly.
One area of learning was in the facilities that US and European corporations set up in China. Nobody forced apple or other technology companies to set up in China where Chinese could learn. The government could have outlawed shifting factories to China, or taxed profits from Chinese made goods higher to support domestic industries. It would have been against ideology - so don't complain - always takes two to tango.
They Didn't steal it.
In order to have a plant in china, western companies had to turn over 51% of all shares of the company in china to a chinese partner.
A lot of those partners then decided to sell the product specs to other chinese producers and everybody lost their patents.
They didn't steal it, western companies where blinded by greed of a cheap labor force and they where babozeled.
Most western companies had to pull back because of this, the chinese just proved that they are smarter then the west.
I don't know if the Chinese are smarter. Just the western companies are much greedier.
While the giveaway is certainly true, they stole quite a lot as well.
Remember the time countries sold all of their gold at $300/oz? Yeah, same thing. Idiots.
If the US is selling its SPR at these prices, they must know the price is going lower. Either that, or they figure they have enough capacity to resupply, which is likely true, and possibly, the same thing.
Good times for gas guzzlers. Drive Happy!
Hey, wouldn't it be funny if the end result of this credit collapse is mobs storming the Fed and Govt with pitchfolks and shit....i mean, theres no way in the world the US comes out of this US Dollar fiat experiment in tact.....i keep thinking how epic the backlash will be
lol
Your average sheeple have no idea what the FED is and will suck a yard of government dick for another handout. Instead they'll storm Walmart and the Food Lion.
The average clued in person will storm nothing and simply hunker down, perhaps pop some corn and mix a drink.
The US is more likely to be selling our oil so that their oligarchy oily buddies can put the screws to us down the road. There is going to be a lot of money made of this and the NG scam at some point. When it comes it will probably all happen at once too, the dollar will devalue, shale will be shuddered, war will break out, storage will show up unexpectedly vacant... yadda yadda.
Oh yeah... where is Obama's promised veto on the lifting of the US oil export ban? Does this mean it is going to go through? Who could have seen this coming? Somewhere a bunch of NeoCon oilfield types are very confused right now, just as they were when nearly this entire shale boom happened under Obamas watch with no resistance from pesky things like the clean water act. I would say that the NeoLibs would be confused too but they have no damn clue what is going on so probably not.
Senate hasn't voted on it yet, ya dummy
All this talk of China's inexorable march to world domination, reminds me strongly of the '80s, when Japan was on its way to world domination. Straight-line extrapolations from the peak of a credit bubble, are not reliable.
0bama and his minions make a policy that works out well for America's enemy and bad for America-AGAIN.
Where is the evidence Obama is on America’s side?
After all, this is the pResident whose:
1) Parents were Communists,
a. dad’s article on ‘African Socialism:
i. http://www.politico.com/static/PPM41_eastafrica.html
b. mom:
i. https://www.youtube.com/watch?v=eDFYISjnAhw
ii. http://freedomoutpost.com/2012/09/obama-his-marxist-
communist-past-exposed/
2) Grandparents were Communist:
a. http://www.americanthinker.com/articles/2008/10/barack_obama_red
_diaper_baby_1.html
3) Hawaii mentor was a Communist,
a. http://www.aim.org/aim-column/obama-admits-communist-schooled-
him-on-whi...,
4) Deliberately sought out Marxist professors in college,
a. http://obamasbooks.blogspot.com/
5) Political career began in the home of domestic terrorists,
a. https://en.wikipedia.org/wiki/Bill_Ayers_2008_presidential_election_co
nt...
6) First campaign was as a 'New Party ‘Socialist’
a. http://www.nationalreview.com/article/302031/obamas-third-party-
history-...
7) Longtime adviser, David Axelrod, has an extensive history of Communist
involvement
a. http://spectator.org/articles/36072/david-axelrod-lefty-lumberjack
8) Marriage was performed by, an Anti-American, anti-white bigot pastor:
a. https://en.wikipedia.org/wiki/Jeremiah_Wright_controversy
b. https://www.youtube.com/watch?v=vdJB-qkfUHc
c. https://www.youtube.com/watch?v=FqPUXjFYh38
9) Presidential appointees include an open Communist,
a. https://en.wikipedia.org/wiki/Van_Jones
10) Closest aide, the Iranian born Valerie Jarrett has numerous Communist family (mother, father, uncle, grandfather, grandmother, father-in-law) ties:
a. http://www.discoverthenetworks.org/individualProfile.asp?indid=2418
b. http://spectator.org/articles/63484/barack-and-valerie%E2%80%99s-
great-c...
c. http://dailycaller.com/2015/06/25/fbi-files-valerie-jarretts-family-was-
...
Don't all Communists seek to "fundamentally transform the Unoted States"? Isn't that
what is happening?
How Communists subvert nations:
https://m.youtube.com/watch?v=y3qkf3bajd4
With all those Communists as mentors, he became the biggest crony/capitalist since 19th century.
Buy high sell low!
When your name is George Bush and your cabinet is made up of Texas Oil Mafia you announce to the world like Bush did during his State of the Union address that US will double its strategic oil reserves to drive the price up. It worked!
I believe what ever the US thinks they are doing, the USSR, China and the rest of the gang, are way ahead. Look at how Syria is panning out. You think that was all just luck, c'mon!.
Treason !!
This is nothing but a legacy move by Obama. Government accounting treats this like income to reduce the deficit. They played this same game with loan/bailout repayments from Fannie/Freddie--instead of classifying them as paybacks, they call them dividend income. This is a sure sign oil is going to go up--sell low, buy high Obama you joke of a POTUS. The democrats will be out there saying Obama's spending cuts are responsible for $xxxxxxxxxx less deficit than Bush's last year or whatever base they want to use.
So, where is that Russia's success in Syria? ISIS is doing well and advancing, syrian army can't restore control over aleppo and its tanks are blown up like baloons.
Again, where is that success? At TV?
For all the libertarians feverently hoping for a new era of free market market capitalism caused by China's increasing dominance, you will be sadly disappointed, this article is viewing China through Steve Wonders glasses.
China is a authoritarian regime that runs its people as slave labour, and centrally plans its economy, it has not understanding of the idea of personal liberty, nor has it any desire for anything other than to create structures that both emulate it, and are subjegated to it.
As has been very briefly mentioned, this smacks of the UK's Gordon Brown establishing the (in)famous "gold bottom" by announcing Great Britain's intention to sell half their gold or whatever in advance. He pretty much went out and created a low by idiotically doing this and pre-announcing. But we'd be doing the same thing in essence by observing a low being reached and then selling at the bottom. Not only that, but WTF happens if there's an oil shock the other way around with all the unrest in the Middle East? If we can print trillions of dollars for the financial system - why not do it for the rest of us? Why is everything f*cking possible for banksters regardless of any considerations whatsoever, but a straitjacket is found when talking about normal citizens?. Oh forgot, (we) don't mean shit.
Uncle Sugar is selling oil? Then it's a fair bet oil is about to skyrocket.
I skimmed through the comments but no one has mentioned some important details. The sales don't start until 2018 and they go through 2025. Starts at 5M barrels a year and ramps up slowly. Hardly a fire sale.
http://finance.yahoo.com/news/u-sell-58-mln-barrels-112957895.html
What does that mean? The General Accounting Office and Congressional Budget Office ARE REGULARLY WRONG BY ASTOUNDING PERCENTAGES TO THE UPSIDE with everything they estimate - bar none. Once the concept of doing this is one the table any PROJECTED (lol) timetable is specious. Watch it happen right in front of our eyes.
It is just a way to fudge the budget numbers so they can claim it is deficit neutral - or at least reduce the deficit ON PAPER.
One it gets passed and signed into law - just like every other fucking gamed budget
The money budgeted will be spent - maybe even more than was originally budgeted - but the revenue will never be realized.
It is just a fucking game so the "nonpartisan" congressional budget office can publish a fantacy report scoring something that will never actually happen.
These reports are 5" thick - so they can be used to cover members of congress and the administrations assholes.
Same as it ever was.
Deleted: Double post.
Bush sold at the bottom too in 2009. Imagine that. The same trade being conducted by the government. It is almost like they are doing it so they can make some trade profitable.
I guess after you've hocked all your gold, oil would be next.
+1 That's a good point VW! Just who audits the SPR?
What a crock! 80bill $ INCREASE in defense spending over 2yrs and selling 58mill barrels of oil from the SPR. At 42$/barrel,
that is less than 2.5bill $! On a 2.5trill$ budget! That's ZERO POINT ONE % (0.1%) for those mathematically challenged readers.
No wonder LockheedMartin stock has been on fire! Bomb all you want! We'll build more! bwahahahahahahahahahahahahha
Hey Obozo, Obama the clown telephoned.
He said he wants his name back.