The game is rigged folk’s, there will be blood !

Perhaps most of us won’t find it that funny, but is that important considering the great schemes of things ? I think not. Yes, everything seems blurred, market mismatch are every where, oil is in the crapper, in good company China is there too.

 

The feeling I have is very different. From my prospective, the game is pretty clear indeed.

 

The Washington consensus died when Lehman got bankrupt. From this day on, central bankers worked very hard to gain time for states around the world to find a new global modus vivendi. Currency, banking and oil are at the forefront of the next great deal, no big news there. A  newcomer, gas stand proud in the international game, two wars under his belt. Yes ,Ukraine, Syria, are gas issues.

 

Considering oil, one can find surprising that it’s price is falling very sharply . At this very moment India is gearing up. Despite a world depression, oil consumption will be millions barrels per day higher in a few year. What is happening now to explain the current state of affairs ?

 

Is that not surprising, in the USA, juniors made the bulk of the growth generating huge amount of debt ? Why Exxon and it’s fellow majors did not jump into the game, they got bored of easy money ? Pushing the production in the USA was costly, around 500 billions dollars, a big chuck of money even for an oil giant. Was it not more adequat to pay this investment with printed money ? Is that not smart to push the newcomers into the abyss to buy their asset for a penny on a dollar ? Yes it is, and that’s what is going to begin this summer. In short, the current state of affairs is very profitable to the majors, in the long run.

 

One could ask :  “is that not very dangerous to push the financial sector over the edge once again, is that not a bridge to far ?” This one is easy to answer considering how our financial system appeared following the oil crisis of the 70’s. The money which was taken from the pocket of the consumer by the Saudis and others, came back immediately on the Western financials markets. That’s why deficit didn’t matters, for a very long time, fresh money was to be coming for sure. Bankers where given the heavy duty to manage it in the best interest of the public, in order to prop a good healthy economy. It was a tremendous success, Alleluia ! That game is now over, deficit have became too heavy, structural unbalance are too enormous.

 

Following my argument, one should understand that our financial system will change deeply very soon. Hard times are coming for New York, London and Paris, London especially, sorry for you UK ! But finance is only the tip of the iceberg, oil and gun are the name of the game !

 

The USA are already the biggest oil producer, in due time they will become a powerful exporter, the legal side of this predicament is already fulfilled. In a few year people will see it clearly, Oil production will bring a new wealth to the USA but Wall Street will be very diminished it’s political usefulness being exhausted. It will change the political balance for this great country and many others.

 

The end of the presidential campaign, as usual, will be the best moment to move. The market are going to explode , oil juniors will bankrupt themselves in numbers, along with financial institutions. That’s for 2016, cool.  But the real fun will come in 2017. It will be time to see the oil price going up and up and up in order to launch a new wave of investments around the world. Do you really believe that Exxon is going to pay for all that ? No price will do that surely.

 

At this moment, the USA will appear to be broke, completely. Defaulting will come to mind, quicker even that with the QE which are a soft way to do so. Those parameters point directly to the good people of Saudi Arabia. Pushing them over the edge is a nice solution to kill two birds with one stone. Enormous problems are on their way for the Kingdom, and angry Iranians won’t be the worst. Alas, when Ryad will be burning, the  USA will suddenly find it very hard to « locate » the wealth accumulated by the Kingdom in bonds shares and other assets. In short, China will receive Saudi’s money is that not nice ?

In the end, President Donald will travel to Moscow in his brand new golden Air Force One, embrace Vladimir. Together, they’ll set the new oil price for the world as well as many other petty things. Russia and the USA will be the new OPEP and believe me, they will manage their position in the best interest of every body, for sure…

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