Reading the BIS pressrelease from yesterday (June 28th) i found some interesting comments on the oilprice that sort of fits into the overall BigBank plan. (BIS/Bank for International Settlements) beeing the mother of all BigBank institutions …
… An essential element of this rebalancing is to rely less on demand management policies and more on structural ones, so as to abandon the debt-fuelled growth model that has acted as a political and social substitute for productivity-enhancing reforms. The dividend from the oil price drop provides an opportunity that should not be missed. Monetary policy has been overburdened for far too long. It must be part of the answer but cannot be the whole answer. …
No doubt they are planning for lower oil prices AND further QE (ie. Monetary policy), but are healthy enough to realize that unless there are price deflation from lower energy costs the increase of debts will not work in their favour but only lead to instabilities (see Greece).
Maybe they’ve already given up on Greece as shown in this Freudian slip found by WSJ according to Zerohedge. In the final report at the bis.org web Greece us blue again … Coincidence or plan?
One way to make some prognostications is to look at recent history. Below I made macro charts showing some of the most interesting markets to watch on a one and five year time frame.
If you read my posts you know that I have been promoting the SPY/USO trade. Here you can see why.
- A belief in LENR, although with an undecided time frame.
- A belief in continued QE, money printing and low interest rates with basically no end in site, unless some new technological breakthrough revolutionizes society …
- A belief that this money (if any return is wanted) needs to end up in either real estate or stock markets (maybe a little gold).
The result has been tremendous. Mostly since last summer of course, but the main point is that it outperformed all other markets almost all the time even before that.
Looking at the one year chart is maybe not as interesting except for the period since February when the 20y+ bonds peaked. We actually see rising interest rates right now together with decent performance in stocks and copper (which is a good growth indicator).
One conclusion is that FED/Banks/.gov will continue to print money. Because they can and because it, in relation to other geopolitical areas, will increase influence and power – the USD being the prime carrier of value. This will continue to create debts among taxpayers and other entities. And when interest rates are raised due to growth profits will rise (and with them; control, influence and power) since the money was basically a free resource to them. When it can’t be repaid collection of real values like real estate and savings/future taxes of taxpayers (see Greece foreign debts…) will be the result.
This game will continue. Unfortunately LENR will not help those in debt. Even at near zero interest these are burdensome in many places. And cheap energy will not pay them off. In the longer run, deflation will actually increase the debts in terms of necessities like food and energy. For many countries and individuals, raised interest will be more or less like taxpayer slavery. Again; see Greece.
This is why it is important to watch what “.gov”s around the world are doing to enhance control over information networks. Threats of external criminal activity and terrorism are basically marketing with an agenda. Basic psychology teach us that sense of security is a pretty basic human need. And to use fear of lost security (i.e. threat of physical violence) is therefore an excellent marketing argument, better than sex and only barely below feeding someone that is starving. Terrorism is of course bad, but rarely really disruptive or a personal threat to those in power, and therefore not very important to get rid of. Especially since it has huge marketing value for greater and more important goals.
The real agenda is always revealed by following the money (and the power that follows). For .gov entities this comes down to collecting taxes and gain control of the taxpayer.
It’s only logical.
Great news. For good reasons Norwegian media seems to be on their toes looking at LENR from a fact standpoint (as opposed to conspiracy theory nonsense presented as physics theory by random academics and their media sheep). Press here for story. And here for the previous one.
And it’s not science fiction.
I found some interesting data studying Oil vs. Gold and comparing it to Oil vs. dollar. It shows I believe in a clear way the FED/BigBank strategy to stabilize oilprice since the financial crisis. Until october 2014 … (updated slides)
I’ve also updated the slides with som comments on BigBank strategy on money printing.
Most importantly cheaper energy enables printing huge amounts of dollar for themselves while still deflating the currency. They have to do it as a counter meassure against falling prices in energy.So they will print more and increase debts and prices (stocks and prime real estate). If they don’t they will implode and their influence will quickly vane because debts could be paid off.
This is not a coincidence …
The big question is what will happen now. The banks have a really hard time stabilizing the oilprice because the strong sentiment following the bottoming out at $45 and then starting to rise. After that we saw several big banks reaching out in media to promote continued prices in the $40-60 range. We saw multiple explanations of high supply and low demand, high oil rig counts, etc, It seems to work at the moment.
My prediction now is a stable oilprice in the $40-$60 range and an inflating stockmarket due to massive money printing. The new money has to go somewhere … Also the lower energy prices will result in higher profits and consumption.
Taking the long view (~5 years) I predict Big Oil selling a combination of LENR produced synthetic fuels and Saudi Oil at about $10 /bbl. LENR for heating and domestic electricity will be decentralized in rural areas and using more advanced grids in the cities. Utilities will charge for infrastructure and support/maintenence. They will collect information everywhere (smart grids …). It will of course be possible to live off the grid, but it will be cumbersome.
In a slightly longer view (~10 years) I predict massive innovation in LENR on-demand hydrogen production for combustion and/or fuel cells/batteries for electric powertrains. Sterling motors will of course also be an interesting alternative. BTW All these devices will of course send data to the information grid (Internet of Things …).
Here are som slides I made to explain my view of the oil market vs. a possible LENR breakthrough including geopolitical issues in the coming years. Click here or on the picture to open the presentation pdf.
Looking at the picture above it is pretty clear that the LENR Black Swan is a complex issue in the US. Mainly because the dollar beeing connected to Mid East oil supply. This does not mean they will supress it (anymore), but they will try to delay the breakthrough enough to exit as much of their interests as possible in a controlled manner. This requires, among other things, oil in a price range of $50-$60.
I’ve included most of the LENR keywords in my Twitter fire hose feed and made some statistics. Below is a list of tweets updated every minute and a graph showing the number of LENR impressions on daily basis. I’ve posted it here as well and set the page to automatic update every 60 seconds.
Timestamp(GMT) *** Reach (number of followers) *** Tweeter (account) *** Account Description *** The Actual Tweet