Somewhat connected news

Yes, news has two options, it is either connected or it is not. This sounds silly, there are plenty of news articles with no connection at all, but what happens when there is a link (to some degree)?

It is that setting we regularly face. I actually wanted to link in Reuters news, but they screwed up their system, there is no replacement for competency and Reuters seemingly lost that. But to some degree there is a larger stage. CNBC gives us ‘U.S. to release oil from reserves in coordination with other countries to lower gas prices’ yes that is a setting we get, but the article at Reuters, which is now beyond reach is alerting us to market volatility, that is a setting we get. Yes we see all kinds of voices to state that we have to let go of fossil fuels and I get that, it makes sense. Yet we now get “The U.S. will release 50 million barrels of crude from the Strategic Petroleum Reserve, the White House said Tuesday”, this sounds great, but consider that this represents a little under 10% of that reserve. So what happens when the reserves are gone? So when we see “part of a global effort by energy-consuming nations to calm 2021′s rapid rise in fuel prices” we all tend to see a good thing, and it is for the most a good thing. The issue that Reuters cannot give us is that there are larger concerns. These oil executives are right, even though they are in part buttering their own bread, the reality is that the need for fossil fuels is so in our systems, the need will remain for at least a decade, a decade we actually do not have, but COVID could kill over 22.8% and solve the issue for us. 

You see, if you want to debate that and oppose that, that is fine. To these people I say ‘Drop the use of your car and your furnace for a month, just one month and you will be right’, that is a lot harder to do is it? How many can go without your car, your motorcycle, and your oil based heaters? You might think that you are in an apartment building, so it does not hit you, but your entire building has a heater, shut that down for a month and see where you are then. These two alone will result in the ‘Yes, I will, I just have to’ group. They cannot leave their car alone, it is part of them and that is fine, but you cannot have it both ways. 

I think it is a decently wise move to sell from the reserves now, but there is only so much reserves and this will not go away, so when we realise that, oil will go from $87 a barrel to $154 a barrel in a hurry and there is a second thought, that market will be a lot more volatile when the reserves are gone. And that is before people realise that agreements when dropped tend to be more expensive once they pick them up again, because that is most likely the result of enduring volatility. The US is not alone in this, but in this case their setting is important. You see, France became part of this. We can say it serves the US right for messing with their submarines, or we can look at the larger station. The news ‘France signs $18B weapons deal with UAE’ (at https://www.defensenews.com/global/mideast-africa/2021/12/03/france-signs-18b-weapons-deal-with-uae/), which replaces the Reuters news, for competency reasons, is one that shows us “The UAE is buying 80 upgraded Rafale fighters in a deal the French Armed Forces Ministry said is worth €16 billion (U.S. $18 billion) and represents the largest-ever French weapons contract for export. It also announced a deal with the UAE to sell 12 Airbus-built combat helicopters”, I am honestly happy for France (even though I lose out of 3.75% commission now), but the larger stage is that the US loses the anticipated $18,000,000,000 as well. And it is not that they didn’t need it with debt ceilings, resource shortages and contracts they might lose after that. And this links to it as others (Saudi Arabia) will also consider alternatives. So when you see this in the light of ‘the sector’s largest 25 companies totalled US$361 billion in 2019, 8.5 per cent more than in 2018’ (source: Sipri) a setting where the shift in the top 25 will shift to other players in that list, the US economy would take a massive hit in 2023-2024 I reckon, a setting that they could have avoided and the senate issues next week are important. When they are cancelled, take notice of ALL the senators who opposed them, you see they will give you some BS human rights setting, and that is fine. But the consequence is that Americans will face larger and harder heating bills and fuel prices. And then there is the setting that Rand Paul (Kentucky), Mike Lee (Utah) and Bernie Sanders (Vermont) leave you with, not the setting of “argued earlier on Tuesday that Saudi Arabia’s role in Yemen’s civil war, including an air and naval blockade of Yemen, “is an abomination.”” What they (intentionally) forget to mention is that the Houthis are the aggressors and they get direct support from Iran, and to some degree Hezbollah too. A stage that the people do not get to see, the media is making sure of that, or at least their stakeholders are. 

And it will fuel the fuel prices. You see the US needs these funds to pay debts and to get a smooth quality of life result in the US, when that falls away settings that I have stated over the last few weeks will hit US citizens hard, much harder then ever before with dwindling sources of revenue. 

And the jester from Kentucky adds to this with ““For years now, ships that would otherwise carry food, fuel, and medicine are turned away by the Saudi-led coalition, depriving the Yemeni people of the necessities to sustain civilisation,” Paul wrote in an op-ed published in The American Conservative” Yet when we see “Three-way talks between the Houthi rebels, the UN-recognised government of Yemen and the UN have foundered, despite repeated warnings, including at the UN security council, of the impact if the tanker explodes, breaks up or starts leaking. UN officials have been unable to secure guarantees to maintain the vessel, including its rotting hull, which is now overseen by a crew of just seven”, I am giving you another part, yes, there is a blockade by the Kingdom of Saudi Arabia, yet the setting is that too many goods will end up in Houthi hands and it is something that US intelligence operations know as well, it is a dirty mess down there (not part of this conversation). 

The stages are fossil fuels and revenue. The US needs both, and as the reserves are now tapped, the US will desperately need revenue, a setting that is diminished by some of the players. Not merely the stage of lost revenue, the stage of catering to Iran is a much larger problem. 

So the articles are merely casually linked, or perhaps more correctly stated ‘seemingly casually linked’, seemingly is a much larger word in that equation and it is ‘hindered’ by my personal view, yet I have shown (way too often) that I tend to be correct in that setting. So enjoy the future people in the US (EU too) will face. When the reserves run dry (no exact date can be given), the loud Ka-Ching sound in the sky will be the start of your energy and fuel prices going up by 20%-30% again and again, I personally believe that it will take a few more months after that months until the previous maximum of June 2008 at $156.85 per barrel will be reached, but after that the sky will be the limit for those selling fossil fuels. You did realise that, did you not?

So when you consider that over the last year energy prices have gone up by almost 50% (in the US), consider where it ends as revenue goes down further, consider how much reserves would be needed to address just the last year price hike and the price hike seen over the next 12 months. I reckon that the reserves will end up getting tapped by well over 10%, and I have no idea how long that will stop the price hikes, there is too much data missing and those who have that data are not lining up to share it with the world, let alone little old me.

So the stage of somewhat connected news is set to raise the bar on several fields. And for people to feel the need to stop Saudi arms sales, I get it. I would feel the same way if I was given such a one sided story by the media, but I learned to look to a much larger station (and a lot more sources). Yet with all the COVID protestors help will come from an unconsidered option, we merely need to lose 32% of the population to halt fuel price hikes, stop pollution settings and reduce the carbon footprint by enough, as well as food shortage that will come next. 

Yet I feel certain that plenty of people will disagree. 

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Filed under Finance, Media, Military, Politics, Science

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