Hard to believe, but yes. It seems that the price of oil will not be ‘recovering’ any time soon. Evidently the big “D” that bankers have tried so hard to stave off for decades is finally upon us. No, not depression – they don’t give a sh*t about us. All they care about is prices. DEFLATION is upon us.
The latest government report showing an increase in already-record crude oil supplies is sparking speculation the market is setting up for a selloff that could take oil prices to a new cycle low.
“It says prices are going to remain under pressure,” says Andrew Lipow, who expects oil to retest its recent low and head to $40/bbl.
“WTI could take another leg down,” says Citigroup energy analyst Eric Lee. “If imports into the U.S. don’t budge, which they won’t… if exports don’t rise quickly enough, which is a wild card, then producers at various locations need to shut in pipelines or run at low utilization.”
Goldman Sachs President Gary Cohn warns that crude could fall to $30 as the industry runs out of storage space; with the winter heating oil season ending, refineries are turning to producing more gasoline for the summer driving season, he says, meaning they will not need crude oil for weeks or months.
$30 oil could even have an important impact on the Fed’s timeline for raising interest rates; “It’s hard to raise interest rates potentially when you see deflationary oil prices,” Cohn says.
In case you think this is unlikely to happen, keep in mind that in January Wapo sounded the death knell for oil, arguing that solar energy was rapidly replacing it. It all makes sense. The stockpiles of oil and other commodities; the rush to war of all kinds – no doubt to get rid of more stockpiles, not just of oil, but of the military kind.
We are witnessing a worldwide US-led ‘consumption’ frenzy in a mad rush to use up the excess production capacity that the rest of the economy will not, indeed cannot possibly utilize, because simply we are not permitted to do so, since we are routinely money starved. In the process, the US intends to destroy as much of the competition as they can manage, so as to emerge victorious as the only super power in town.
I will end by quoting a FB friend, who in turn quoted another, as the deflationary spiral begins:
“The one thing missing now is whats up next?
Do you want to know?
Well as inventories now start the spiral upwards, rising at ever faster rates, in the next one to 4 months, and the fact becomes embedded in the consciousness of these so called managers and supervisors, they will start panic cancelling of the next gigantic shipments of goods from China.
But the docks in Shanghai GZ HK and SZ are stuffed with ships loading, the seaways are full of ships on route, and the west coast ports are stuffed.
It takes 5 or 6 weeks just to cruise the Pacific, add in the delay to allow the feeble brain cells of said managers to register something is going wrong , what say another 3 months, and it becomes easy to predict when the panic inventory sales will start.
Because inventory sales have to follow.
Do you want to know why ?
Because in the last quarter, 96 % of all income in the SPY went on stock back buybacks and dividends to prop up the bubble.
In other words, peak cash flow, and overflowing inventories and dropping sales. does not leave enough room for these supervisors and managers to finesse another stock buy back to keep their inflated salaries and bonuses growing.
And because of falling sales, it cuts the line of credit down and makes it more expensive to borrow to finance said stock buybacks and dividends.
So next we can hear their little brain cell churning data, and they figure that s the great inventory liquidations get under way, they might as well get the great layoff and sacking underway too just to make sure they have enough cash to burn on their vastly over priced stock and waste on dividends to themselves.
[But] wheres the cash coming from.
You got it, from the fucking useless yellen bitch, who will crumble and fold as soon as they tell her to, and that’s why interest rates will never get off ZIRP or less, and QE fucking 87 or whatever it is now gets under way.
But this time it won’t work quite the same. Because no one will believe the dumb cows excuses for starting it and it would need to be orders of magnitude above the last printing binge.
Small businesses, SME’s non listed corporations will get hit first, like a fucking meteorite dropping on them, orders will simply vanish and invoices will be unpaid and banks will spend more time hunting them with dogs and guns.
Bankruptcies will make a mushroom cloud, and unemployment will reach 500k or even a million a month.
With zero savings, starvation riots and social breakdown hanging heavy in the air, all money printing will be directed at hand pouts and not the C – suites, much to howls of protest from the fucking wankers in Wall St.
by year end, DOW 6,000, S&P 500, NASDAQ under 1,000.
Now you can call it for it really is.
A depression, one to make history all over again.”