OPEC – OIL – THE COST OF “EVERYTHING”
Oil is not rare or scarce in any way. Oil price has been a feature after World War II of monopoly price controls, much as with the Diamond Markets and DeBeers controls. In the 1980’s market control shifted in digital power trading to SPECULATION AND MANIPULATION. This global loss of OPEC price control shifted price to market speculation in which “traders” made oceans of profits the Producers never saw – while to be sure an unholy alliance of producers into profit making INSIDE the speculation market took place creating profits for producers from rising prices and profits from speculation trades INSIDE the market. No one went to jail as this hidden tax upon the price of EVERYTHING was levied upon the hard working peoples of the world. Consider oil is the base stuff of:
- Transportation and its manufacturing
- Energy in general from lights to factories
- Materials from anything plastique or related from containers to parts and goods.
- Fertilizer and pesticides without which 50% of all food crops would disappear.
- Movement and storage of food to market including containers.
- Aero Space materials
- Defense and its operations and materials along with powering over 1.2 million vehicles and aircraft
- Air transportation for the rest of us
- So much MORE
So the industry of petroleum is an economic ESSENTIAL. When digital trading and SPECULATION began to control prices regulators had lost their ability to regulate because the laws are all LOCAL and the digital trades are all in the unregulated CLOUD. A G 100 new regulatory scheme is called for – one which we have written about now for five years – where the G 100 COOPERATE versus COMPETE inventing a frame work for mutual sustained prosperity. It is not hard. It just requires a mind set.
As special interests profiting from the lack of regulation fund the mind set of most politicians the present system of competitive capitalism and competitive communism is flawed – sustaining an elite class against the interests of the multitudes – us.
The current system has not changed since Rome. The social classes remain:
- Royals who by birth and wealth underwrite national agenda’s
- The merchant class who petition and seek access for favors from the Royals.
- The serf’s – the multitudes – who are wage slaves living in JoBs – just over broke.
An economic system that WORKS and provides mutually assured prosperity – MAPS – is the revolution I call COOPERATIVE CAPITALISM and that I have outlined in my world publication now at Amazon – REDEMPTION THE COOPERATION REVOLUTION. A blue print for a new economic global revolution that is bloodless and reformative and in which everyone of the CLASSES today WINS. There are no losers save competitive mind sets who wish to dominate for the pure insanity of that thought form. Those minds are dying while sane minds are thriving around them. And they know it.
Back to OPEC. Yesterday I gave you the OPEC TRAP for the cost of everything. That economic trap goes something like this:
- Opec wants permanently higher prices
- Demand is falling supply is rising
- Scare propaganda supply will fall and demand will soar is a lie
- Lies no longer work as data is on line
- The supply is soaring against a falling demand
- Five miles of ships reside off shores of consumer nations with no place to store oil
- Oil DROPPED 2% over night – as I predicted YESTERDAY
- Experts were in all news saying the best investment is to buy oil
- I said – NO WAY
- If Opec raises prices customers will leave OPEC and buy from lower cost supply
- These customers will never return to OPEC
- New supply sources are plentiful and growing
- North America at a specific price of $ 45 to $ 50 can produce more oil than OPEC
- Other sources coming on line have more supply than OPEC
- All against a falling demand that will fall forever now
- Oil is as a premium product – from market realities – deader than a coffin nail
- Oil as a commodity priced by the market will seek a price level that sheds the HIDDEN SPECULATOR TAX of the last 20 years.
Saudi wanted to remove speculation from the market. This has been done largely as an unintended consequence of their own policy to preserve for customer base in a new and long lasting MARKET SHARE WAR that is on going and long lasting. Today at any price the game is to buy and secure MARKET SHARE inside a world DROMING IN OIL.
Attempts to spin the oil markets with media and manipulation of data will not work as the data is on line and the market is not about to LOOSE MONEY in wild bets that won’t work today to manipulate and control prices.
So we have a history of:
1900’s to 1950 – Market controlled oil price via laws of supply and demand – oil was low cost and energy was low cost – propelling the highest rise in human living standards in 10,000 years.
1950 to 1980 – OPEC monopoly controlled oil price – more uniformly matching supply to demand with artificial premium prices built in – modest tax – upon all people – greatest wealth transfer to OPEC members in the history of economics of all time.
1980’s to 2014 – SPECULATOR price manipulation with huge premium prices shared between producers and market speculators – largely shadow banking – all unregulated with fantastic leverage – the largest hidden tax upon the people of the world since Rome by percentage.
2014 to 2017 – MARKET CONTROLLED PRICING as the price of oil now in huge surplus over demand, a complex basket of factors, permanent, ripped control from speculators due to LOSSES, as thier game no longer worked financially, and neither suppliers or speculators can return premium pricing to the real economics of oil pricing which has returned to SUPPLY AND DEMAND pricing removing the hidden tax upon the peoples of the world.
We reported to you yesterday OPEC was TOAST. It is trying to keep an APPEARANCE it has relevance when in fact it no longer has even influence upon oil pricing. Its members including Saudi Arabia are in serious recession downward spirals because of the data we have presented to the world – above. The history never lies.
Data never lies.
Media does and speculators feeding media lie.
Saudi announced they will NOT even ATTEND the OPEC meeting on Monday. Their attendance would bring them into the final destruction of their own credibility. OPEC would fail to cut back on supply. Supply will over supply world demand throughout 2017 into 2018 and beyond. Any other representation is a lie.
Oil can not return to premium pricing without supply interruption caused by war.
Without war and even with war oil will be plentiful due to American endless supply streams at 50 dollar oil or above – where much of the world market will shift to North American supply over Gulf Supply.
Trump will turn on North American oil, like no generation in human history. More oil will begin to flow from America on shore off shore and in global discoveries than at any time in modern history. Trump promised to make AMERICA ENERGY INDEPENDENT. This is a world game changer and a Gulf economic game changer.
We have proposals into SAUDI to reform their economics where McKinsey after 100 million of investment and more is a Gulf SCANDLE with enormous political capital beings squandered. Why? Such institutions who train Fortune middle managers on performance have zero capacity to revolutionize economics for nations. My father has done so for Korea, China, India, and much of Africa and made sure when I assume management of his teams, I had the background experience and his legacy to reform nations rapidly on the integrated master planning and execution basis. As I don’t charge the going rates my low price point makes our integration a slow decision process – but it always comes on line because all other options fail and cost TIME more than MONEY. We save both. So we are hopeful to breed COOPERATIVE CAPITALISM to replace oil as the driving economic in the Gulf where human capital elevates a permanent sustainable economic THRIVE IN FIVE-year approach to economic hope and promise.
So the Saudi’s saved tons of embarrassment by stepping back from DYSFUNCTIONAL OPEC where the world appreciates “lip servvice illusion to cut backs” is a lie. You can’t increase production in 2016 by two million barrels a day – cut back by one million – and suggest you really cut back. You just cut a part of the OVER SUPPLY and the SUPPLY pumping over demand continues after the cutback. The market is not entertained by lies. The price is punished by lies.
It is more stable and reliable to avoid third party speculation and OPEC intrusion into the supply-demand markets – where the battle is the MARKET SHARE WARS as to who will get India, China, Asia in general, Africa long term, for energy supply. America may be the enormous winner as the COST OF EVERYTHING owned by America is the largest total supply on earth, and is underwriting the American Dollar against phony currencies like China which no one see’s as anything but a disaster about to take place.
China will HARD as in SUPER HARD crash now that they have kept their declining economy from total crash by spending borrowed 300% more than they take in as income annually for years. You can not economically borrow 300% to gross income for years and fail to have a SUPER HARD LANDING. The old rule applies. What goes UP must and WILL come DOWN. BAM.
Super CRASH. Caused by China whose communist leadership failed to heed any of the warnings or help from IMF, World Bank, and others including the USA and EU.
Marching to their own failed communist policies established by history to destroy nations and economies in nations why anyone chooses COMMUNISM is beyond me as an investment banker economist. It is the worst economic form of system modeling for the many while the elite use violence to retain power.
In 2017 China has as does Iran THE GREAT FIRE WALL where their people can only see the world through their filter. Iran is much freer and their people can get on FACE BOOK. In China, they can not. Way to go Iran.
Iran is pumping oil like they deserve to be back which will translate in 2017 to prosperity jobs and the end of hard hard times for IRAN. Good policy moves nations bad policies decline nations. Inspired leadership is modeling for the many against the few versus the few ( elites ) against the many. Which is GOOD ECONOMICS. Long term.
So OIL the COST OF EVERYTHING is going to get less costly.
Economics nothing else for some but not all of the reasons set forth here. A bad investment bet is to bet on oil rising. Bad bad bad and as it has since 2014 the bet that has cost market speculators over ONE TRILLION US DOLLARS in LOSS.
Whoever wants more of THAT or thinks they can return to the old speculator driven markets has lost touch with core economics and is playing by an outdated obsolete rule book today.
Market forces control price and will for the long term. Manipulation from fringe producers like OPEC and influence from any producer or speculator group is not going to work. Regulations are coming to make sure and the market has already made sure.
I’m Berny Dohrmann and I’m sticking with my already proven out message. My latest prediction against all the experts in Media last week was proven correct – OVER NIGHT. I just told you WHY.
Berny Dohrmann – on the COST OF EVERYTHING – keeping a light on just for YOU— November 26, 2016