We\'re at the fag-end of debt-based finance capitalism

http://m.youtube.com/watch?v=B09vES4HUQk&desktop_uri=%2Fwatch%3Fv%3DB09vES4HUQk

Doubts on Saudi Capacity May Keep Oil Volatile

Oil prices are likely to remain volatile over the next year, analysts say, amid worries that Saudi Arabia has become less able to pump the global market out of any extraordinary disruptions to supply.

Saudi Arabia and some smaller Gulf oil producers have stepped in to cover recent shortfalls, but analysts are increasingly skeptical about whether these countries have the capacity to shield Western consumers against a new oil shock.

"The cushion to cope with supply shortfalls looks uncomfortably thin, especially in light of heightened geopolitical risks in the Middle East and Africa," Deutsche Bank said in a report Friday.

http://online.wsj.com/article/SB10000872396390444358804578016140459750174.html

Proff Kjell Aleklett - Will Saudi Arabia Become an Oil Importer by 2030?

the volume of oil available for importation by the OECD nations in 2020 will contract by half compared to what was available in 2005 when “Peak Oil Exports” occurred
http://aleklett.wordpress.com/2012/09/12/will-saudi-arabia-become-oil-importer-by-2030-new-blogg/

The Next Recession Will Be Triggered By Oil

At this point all the pieces are in place for the inflationary spike and currency crisis I’ve been predicting for 2014. We now have open ended QE that is tied to economic output and unemployment. But since debasing currencies has historically never been the cure for the bursting of a credit bubble, all the Fed is going to produce is spiraling inflation. So as this progresses we are going to see the Fed printing faster and faster as the result they are looking for never materializes. This is what will ultimately drive the currency crisis at the dollar’s next three year cycle low in 2014.

At this point, watch the price of oil if you want to know when the next recession is going to begin. As I’ve pointed out many times in the past, recessions (well, at least since World War II) have all been preceded by a sharp spike in the price of energy. Any move of 100% or more in a year or less, has historically been the straw that breaks the camel’s back. Modern economies cannot survive that kind of shock. It invariably triggers the collapse of consumer discretionary spending and economic activity comes to a grinding halt.

So we will watch the price of oil as it rises out of its three-year cycle low. If it hits $160 by next summer that will probably be enough to start the economy on the next downward spiral. If politicians get involved (and I’m sure they will) and try to impose price controls, they will multiply the damage and probably guarantee that the next economic downturn escalates into a truly catastrophic depression.

Until we see the spike in oil and the corresponding damage to the economy, no one has any business trying to short anything – well maybe bonds, but even that will be risky because the Fed is going to be actively trying to prop the bond market up and keep interest rates artificially low.

All in all there is going to be so much money to be made on the long side, especially in precious metals, that no one needs to fool around with puny little gains on the short side, especially in a market that is going to be hell to trade from the short side. The time to sell short will be in 2014 after the dollar’s next three year cycle low. The dollar’s rally out of that bottom will correspond with the next global economic collapse, ultimately caused by the decisions made by the ECB and the Fed this past week. I dare say if they could see the damage their decisions are going to inflict upon the world and the dire unintended consequences, maybe they would finally stop kicking the can down the road and let the economy heal naturally. Of course that would entail several years of severe pain and politicians, as we all know, are extremely allergic to that.

The period 2014-2015 is when we are going to see the stock market drop 60-75% and the next great leg down in this secular bear market. But until then there’s probably a pretty good chance we are going to see the S&P at new all-time highs in the next six months-12 months.

http://www.resourceinvestor.com/2012/09/17/the-next-recession-will-be-triggered-by-oil

The March to $200+ Oil - Expected over the next 2-4 years

Executive Summary

• Why pressures to the downside have less impact when the global economy is weak
• Why oil's new floor is $80
• The 'upside risk' story for oil prices
• Why prices will march up to the $150-175 range over the next 2-4 years (with increasing sensitivity to spikes of over $200+ per barrel)

If you have not yet read Part I: The Repricing of Oil, available free to all readers, please click here to read it first.

I encourage others to read the entire recent paper on Nominal GDP (NGDP) Targeting by Michael Woodford (recently delivered at Jackson Hole) or to simply read its coverage, either by Joe Weisenthal at Business Insider or Paul Krugman at the New York Times. In short, I take the appearance of the Woodford paper(link opens to PDF) as the inevitable next-step solution to the problem of unpayable debt and scarce resources. By loudly and flagrantly voicing a policy pursuit of inflation, Nominal GDP Targeting (which has been discussed for some time in economic circles) would be the next iteration of behavioral prodding in Western economies.

More importantly, the growing acceptance of NGDP targeting in policy circles simplifies the battle that began a decade ago: the struggle to counter emerging scarcity of natural resources with the provision of greater and greater amounts of cheap credit. Within the contours of this battle lies the answer as to whether oil’s next major move is downward, in a deflationary collapse, as global demand vanishes in a new economic crisis; or whether oil’s next major move is higher, as the five billion people in the developing world pull the OECD along in a new expansion.

http://www.peakprosperity.com/insider/79591/march-200-oil

We Are Now Beginning The Last Wave Of Gold's Major Uptrend

On the heels of the Fed announcing QE3, and the gold market surging higher, today King World News wanted to speak with the firm that is calling for $10,000 gold.  Paul Brodsky, who co-founded QB Asset Management Company, had this to say about what what the Fed and other central planners are doing:  “What I’ve noticed about today’s move is that the Fed embarked on more QE, but without any pretense, it seems, of economic stimulation.  I think this is something that investors, economists and others should take note of.”

Paul Brodsky continues:

“It may be ‘crossing the Rubicon’ if you will, from the thinking that the Fed might be able to elicit a cyclical economic rebound, to it looks as though we have a serious debt problem.  In an economic environment in the United States in which the budget deficit is on pace to grow at $1 trillion a year, it seems to me that the markets are starting to internalize that this is something bigger than what was previously acknowledged.  

We have been arguing for quite some time now that this really isn’t an economic stimulus game that the Fed and other central banks are playing.  What they are really trying to do is to de-lever the system....

“We see the $40 billion a month in mortgage backed securities purchases as being a way to put your thumb in the dyke.  We think it’s only going to get larger.  There is much more of this to come.  The frequency of further QE announcements is going to be greater, and it’s ultimately going to lead to much higher resource and precious metals prices.

Gold was up today, but what I really think we are looking at is a fundamental shift in investor psychology in that there is only so much central banks can do in terms of real economic stimulation.  Meaning they can’t.  So, again, what we are looking at is a deleveraging process that has to take place.  There is nothing that fiscal policy can do about it.  

We also think we are beginning the next and last wave of gold’s uptrend.  In reality, the move today was muted.  I would agree with Felix Zulauf’s comment (on KWN) today that you are supposed to buy the dips, and that’s been our strategy for years now.”  

Brodsky added:  “I would also agree with Felix that we are in the process of witnessing the end of the fiat money system right now.  The end result is probably going to be a new global currency regime.  It’s the only politically expedient way out.

By the way, the deleveraging that has to take place is the gap between bank assets and base money, and maybe even more than that.  There are only two ways to handle this.  The first way is to let it deteriorate on its own.  That would involve bank system failure and a deflationary depression.

The other way to deleverage is to simply manufacture the base money, which of course destroys the purchasing power of all savings.  We believe this second choice is what the central planners have been and will continue to choose.  This frankly defines QE.  They are confirming it because this is the 3rd round of QE we have seen, and they are going to continue doing more.

The bottom line here is that investors need to make sure they protect their purchasing power as the currencies are destroyed.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/13_We_Are_Now_Beginning_The_Last_Wave_Of_Golds_Major_Uptrend.html 

Jeff Rubin on "The End of Growth"

Part 1
http://www.youtube.com/watch?v=p_-uomh0iY0

Part 2
http://www.youtube.com/watch?v=QPYPX-57K3o&feature=relmfu

The End of Growth
http://www.amazon.ca/The-End-Growth-Jeff-Rubin/dp/030736089X

and here mr Rubins first book:

Why Your World Is About to Get a Whole Lot Smaller
http://www.amazon.ca/Your-World-About-Whole-Smaller/dp/0307357511/ref=pd_bxgy_b_img_b

Peak Oil nu i mainsteam media

Detta skriver nu altså Bloombergs och refererar i sin tur till en analys gjord av Citygroup.

Det är bara 18 år kvar till 2030....

“If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,”Heidy Rehman, an analyst at the bank, wrote. The country already consumes all its natural-gas production and plans to develop nuclear power, which pose execution risk amid a lack of available experts, safety issues and cost overruns, Rehman said.

http://www.bloomberg.com/news/2012-09-04/saudi-arabia-may-become-oil-importer-by-2030-citigroup-says-1-.html

 

Den bakomliggande analysen som visar detta är en model utvecklad av en ameikansk energi expert som heter Jeffry Brown och hans modell kallas "Export Land Model" eller förkortat ELM. I korthet innebär det faktum att produktionen av sk konventionell olja redan har nått sin topp 2006 (se videon nedan) och i de flesta länder och regionen även börjat att gå ned år från år samtidigt som de oljeproducerande ländernas inhemska oljekonsumtionmer eller mindre exploderar.

Om man tar de största olje procuderande länderna sammantaget dvs Ryssland, Opec, Venezuela och Mexico som komsumerar bara dessa länder mer än dubbelt det som Kina konsumerar per år. Och i takt med att standarnden och generella tillväxten i dessa dessa ekonomier nu byggs ut i vissa fall tämligen aggressivt så kommer den ihemska konsumtionen öka än mer i framtiden. Kombinationen minskad konsumtion med okad inhemsk konsumtion gör att det som faktiskt blir kvar att exportera går ner i en fantastiskt snabb takt kommande decennier.

http://www.youtube.com/watch?v=iKkISqOCnVA

Riding out this Depression on a Deflationary Debt Raft

http://www.youtube.com/watch?feature=player_embedded&v=iquemUNNYY8#!

Then regarding the question "what caused creditsm" Richard Duncan argues it was related to the first and second world wars as they left the gold standard and the goverments share of the overal economy was significantely increased via the creation of credit.

In the US the fact the US oil production peaked 1970 as predicted by Marion King Hubbert seems to correlate indeed very well with the timing of the well over 50 times increase in total market debt owed since before 1970 to today from one trillion to 53 trillion in only 43 years..

Q: If America’s oil production peaked in 1970 and has been declining ever since, how has America been able to feed its own growing demand?
A: Imports from foreign nations.
It is no secret that America is addicted to oil. Our nation’s appetite for oil has been steadily increasing over the last several decades. In 1970, the year of America’s peak oil production, we imported only 24% of our oil from foreign nations. Today, that number has increased to 70%. And it is growing. In fact, each and every day America consumes around 25% of the world’s available oil production. That’s about 18.8 million barrels a day! What makes this number even more staggering is that America only makes up 5% of the global population. This means that the remaining 95% of the world’s population must grow and maintain their economies with only 75% of the world’s oil supplies. Sadly, America’s dependency upon foreign oil has exposed our nation’s obsession with overconsumption. Never before in history has one nation been as dependent upon foreign nations for its own supply of energy as America is today.
http://www.youtube.com/watch?feature=player_embedded&v=iquemUNNYY8

Add to that a very different geopolitical areana as illustrated in the ever increasing political turmoil in the middle east after 1970 as the US domestic oil production peaked and the US has to make sure and secure its oil was imported to the country to an ever increasing extent from the region in the world with the largest oil supply - the middle east..

Now as everybody and everything in the economy, goverments, the private sector, housholds etc are totaly saturated in debt we have hit what only can be described as "Peak Credit. This means were now entering a new era we can define as "The End of Growt":

Part 1
http://www.youtube.com/watch?v=p_-uomh0iY0

Part 2
http://www.youtube.com/watch?v=QPYPX-57K3o&feature=relmfu

The End of Growth
http://www.amazon.ca/The-End-Growth-Jeff-Rubin/dp/030736089X

and here mr Rubins first book:

Why Your World Is About to Get a Whole Lot Smaller
http://www.amazon.ca/Your-World-About-Whole-Smaller/dp/0307357511/ref=pd_bxgy_b_img_b

What the Economic Crisis Really Means - and what we can do about it

Doing It Ourselves aims to broaden understanding of the debt crisis and peak resources and encourage action for the sake of personal preparedness, happiness and ethical living. This animation sums up the key challenges facing our global society of credit crisis and resource scarcity and describes a path we can take to a happier life, now and in the future
http://www.youtube.com/watch?feature=player_embedded&v=euhkIesmW7E#!

Photo Of Pipeline Fire And Map Of Awamiya Region

The Eastern region is where most of the oil fields are based. The events, if they continue, might force Saudi Arabia to lower its production expectations this year, thus affecting world supplies, and possible the world economy.
http://www.zerohedge.com/news/photo-pipeline-fire-and-map-awamiya-region

Dr. Colin Campbell on Global Oil Production: “Playing With Fire”

There is very little spare oil capacity left in the world

Jim welcomes back to Financial Sense Newshour geologist and Peak Oil pioneer Dr. Colin Campbell to discuss the global energy situation. He believes that oil insiders around the world know Peak Oil has arrived, but don’t want to alarm consumers and shareholders with the truth. Unfortunately for those weary of high gas prices, Dr. Campbell sees this as just the beginning of much higher prices.Dr. Campbell has over 40 years of experience in the oil industry. He earned a Ph.D. in geology from the University of Oxford in 1957, and has worked as a petroleum geologist in the field, as a manager, and as a consultant.
http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/02/29/colin-campbell-phd/global-oil-production-playing-with-fire

Petrol Panic: UK tanks hit by Iran oil ban backfire

The UN nuclear watchdog says its two-day mission in Iran has failed to produce a definitive result in clarifying the purpose of Tehran's controversial nuclear programme. The IAEA adds that this is due to its team not being allowed to visit a key military site. Tehran - which insists its activities are purely peaceful - in turn says the agency's second visit in less than a month was for talks and not inspections. The Islamic state has also reiterated its readiness to return to the negotiating table. The failure of the IAEA mission might pave the way for more sanctions against Tehran - but previous experience shows that such penalties often end up hurting the countries imposing them, as RT's Ivor Bennet reports.
http://www.youtube.com/watch?feature=player_embedded&v=wgBSo_B6vJ8

I estimate that the ANE decline rate will accelerate to between 5%/year and 8%/year in the 2010 to 2020 time frame

“The actions by many OECD countries aimed at encouraging consumption in the face of declining available global net oil exports can be seen as the OECD 'Thelma & Louise' Race to the Edge of the Cliff.

I suppose that the ‘winner’ could be viewed as the first country that can no longer borrow enough money, at affordable rates, to maintain their current lifestyle. So, based on this metric, Greece would appear to be currently in the lead, with many other countries not far behind them.”

I suspect that we will see a continuation of this trend, as more countries are unable to borrow enough money, at least from non-central bank sources, to fully fund their deficit spending. As this trend continues, I have concluded that there may be a global shortage of calculators, because most of the world seems either unable or unwilling to subtract domestic oil consumption numbers from domestic production numbers in oil exporting countries, in order to derive net export numbers, which are calculated in terms of total petroleum liquids.

While it is true that the EIA shows that total liquids production worldwide, inclusive of low net energy biofuels, increased at 0.5%/year from 2005 to 2010, the use of a calculator shows that the global supply of net oil exports available to importers other than China and India (what I call Available Net Exports, or ANE) fell at 2.8%/year from 2005 to 2010.

I estimate that the ANE decline rate will accelerate to between 5%/year and 8%/year in the 2010 to 2020 time frame.”em>

Jeffrey J. Brown is the creator of the Export Land Model and a Member of ASPO-USA’s Board of Directors
http://www.energybulletin.net/stories/2012-01-02/commentary-2012-predictions

J.P. Morgan expects Brent crude to rise to $118/bbl in 2012

SINGAPORE, Feb 20 (Reuters) - J.P. Morgan Chase raised its 2012 price forecast for Brent crude by $6 to $118 a barrel on supply risks in key producing countries and underperformance in new frontier areas. The bank also raised its 2013 forecast for Brent to $125 a barrel, up from $121, analysts led by Lawrence Eagles said in a research note dated Feb. 19. (Reporting by Florence Tan; Editing by Himani Sarkar)
https://research.tdwaterhouse.ca/research/public/Markets/CommoditiesNews?documentKey=1314-L4E8DJ0OI-1

No more oil for Britain: Iran

Britain faces the danger of fuel chaos as it will be deprived of the Iranian oil after the Islamic Republic announced plans to put an end to its oil exports to Britain and France.

As Iran’s Ministry of Oil has confirmed that Iran will stop its oil exports to Britain and France, the fuel price in Britain is expected to rise to record levels.The news comes as oil prices hit a six-month high with the price of Brent crude reaching USD 120 a week after Iran warned about halting oil exports to the European Union states.

Furthermore, less than one week after the EU countries announcing an upcoming embargo on Iran’s oil exports by July 2012, the average price of petrol across Britain rose to 134.03p per liter (from 133.89p) with the price of diesel rising to 142.32p per liter (from 142.21p).

The Coryton refinery on the Thames suspended its supplies as its insolvent owner Petroplus filed for bankruptcy.The Daily Mail reported “queues at the pumps and soaring prices” as the newspaper warned that Britain’s “petrol pumps began to run dry.”Recent news about Iran stopping its oil exports to British and French companies have resulted in serious implications for the British government as soaring prices and petrol shortage would be felt soon.
http://www.presstv.ir/detail/227559.html

Iran predicts global oil prices to soar by 50 per cent

Iranian officials predicted that global oil prices would soar by 50 per cent in the wake of EU sanctions as the country's oil minister declared exports to "some countries" would be cut off.
http://www.telegraph.co.uk/news/worldnews/middleeast/iran/9047890/Iran-predicts-global-oil-prices-to-soar-by-50-per-cent.html

Coryton job fears after owners Petroplus go bankrupt

24 January 2012 Last updated at 14:15 GMT
Around 1,000 jobs at the Coryton oil refinery in Essex are under threat after
Swiss owner Petroplus said it would file for bankruptcy.
The refinery, which supplies 20% of fuel for south-east England, halted sales
on Monday and told staff it was not sure when supplies would restart.
http://www.bbc.co.uk/news/business-16704661

India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets. By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.
http://www.debka.com/article/21673/

Strait Jacket: Iran to 'definitely' close Hormuz if EU bans oil

EU nations have formally adopted an unprecedented set of sanctions against Tehran - which include a bloc-wide embargo on Iranian oil. The move targets Iran's nuclear program which, the Islamic Republic insists, is for purely peaceful purposes. To discuss the implications of fresh sanctions against Iran, RT talks to James Corbett - editor of independent news website - 'The Corbett Report' which is based in Japan.
http://www.youtube.com/watch?v=PZZdpQQGMKc&feature=relmfu

'Guerrilla assault on Iran well underway'
http://www.youtube.com/watch?v=i-2dv_0hoW0&feature=related