Category Russia Cutting oil production

Feb 24 2024

A European Pearl Harbar Event?


Posted originally on Feb 24, 2024 By Martin Armstrong 

Lithuiana PM Warns of Pearl Harbor Moment

COMMENT: Mr. Armstrong: Nobody has sources like you. You warned that the West would create a false flag to start the war that they need. It took maybe one to two weeks for the news that Russia put nuclear weapons in space, and here, our leading politician came out and said there was going to be a sneak attack in Europe that would be our Pearl Harbor moment. I have come to understand why you are always right. It is because people do react the same way no matter what decade or century.

ačiū.

Thank you for the knowledge.

REPLY: Yes, we are approaching the ECM fate of May 7th, but also the ECM date on the Ukraine war – April 20, 2024. It is getting interesting from a research perspective but dangerous from a human perspective. If you really expected a Pearl Harbor Moment, which was also a deliberately created event to the US into WWII, you would think as head of state, you would seek peace rather than war. Nothing these people do anymore makes sense.

Dec 30 2023

Crazy Stuff – Details of Results from Western Oil Sanctions Against Russia


Posted originally on the CTH on December 29, 2023 | Sundance

I’m very serious when I share with people that almost everything we understand about the geopolitical purposes and impacts of sanctions against Russian economic interests is entirely fabricated.  However, because the scale of the propaganda against us is so effective, breaking the mental/cognitive barrier is almost impossible.

It’s not that situations are ‘shaped’ or information is ‘manipulated,’ like would be the definition of the term “disinformation.”  But rather that the entire construct of reality regarding the economic issues -as presented- is fabricated, created by massive financial interests, and flat-out lies; I mean, total unadulterated nonsense. Complete fiction.

This latest article from Reuters, and the accompanying graphic from ZeroHedge, only scratches the surface.

[SOURCE]

We are through the looking glass folks.  Literally captive to the narrative as sold by our Western government officials, and there’s a huge one-way mirror; beyond which, massive segments of the grey zone are looking at us as if we are pathetic victims of professional propaganda.

The worst part of this dynamic is how the USA looks insufferably weak, because we are playing this massive game of pretending that only the Yellow Zone is participating in.

MOSCOW, Dec 27 (Reuters) – Almost all of Russia’s oil exports this year have been shipped to China and India, Deputy Prime Minister Alexander Novak said on Wednesday, after Moscow responded to Western economic sanctions by quickly rerouting supplies away from Europe.

Russia has successfully circumvented sanctions on its oil and diverted flows from Europe to China and India, which together accounted for around 90% of its crude exports, Novak, who is in charge of the country’s energy sector, told Rossiya-24 state TV.

He said that Russia had already started to forge ties with Asia-Pacific countries before the West introduced sanctions against Moscow following the start of the conflict in Ukraine in February 2022.

“As for those restrictions and embargoes on supplies to Europe and the U.S. that were introduced… this only accelerated the process of reorienting our energy flows,” Novak said.

He said that Europe’s share of Russia’s crude exports has fallen to only about 4-5% from about 40-45%. (read more)

What Alexander Novak shares is stunningly accurate, only the ramifications are far more serious.  This is why I am spending so much time trying to break the issue down into digestible portions.

Russia and Iran are now trading oil (and other things) in their own national currencies, not the petrodollar.  This is the epicenter of a process initially triggered by the BRICS economic alliance and is now taking place in real time while the proverbial WEST pretends it is not happening.   Now, it might sound esoteric, as if it is a disconnected or academic issue that doesn’t have real substantive ramifications, but that’s not true.

I can literally see how global trade is now cost-shifting as the dollar starts to weaken (become less used) as a trade currency.  Again, like our domestic social issues, this de-dollarization process is “slowly at first,” but eventually this is going to come all at once.

As USA consumers we cannot see it yet, because we are inside an economic system that is entirely dependent on dollars.  However, as the devaluation of the dollar continues slowly to happen, outside our dollar-based economy, the cost of goods, products and stuff in the ordinary life of people within the GREY ZONE is now stunningly less.  It’s not showing up in currency markets (dollar -vs- fill_in_blank), because the currency trades are not part of the trade/cost dynamic outside the YELLOW ZONE.

Go into the grey zone and compare the price of “product X” to what you would pay in the United States for “product X”, and you will see the difference in the end consumer price is starting to widen faster.   Identical goods in the USA cost much more than goods outside the “west.”

As the de-dollarization continues (mostly driven by the lessening of oil sold using the petrodollar), the disparity in price will get even more stark.   As a result of this dynamic, wages in the USA (or the “west”) must necessarily rise faster; however, that’s only part of the issue.

If I took $200 into a Russian supermarket, buying only consumable food products, I would end up with about 3 shopping carts full of food.  Take that same $200 into the average USA supermarket and you get one shopping cart or less.  This is the scale of what is likely to happen in durable goods.  The “cleaving” is underway.

Let me say that again, the “cleaving” of dollar-based price/value is underway.

Starbucks pulled out of Russia.  The building still exists, the furniture still there, the equipment still there, just a different name, “Star Coffee” lolol.   Starbucks is roughly $6 for whatever, the StarCoffee is $1.  Same stuff.   A cab/uber ride in USA might be $25, or in EU might be €30, but outside the yellow zone around $6 to $10/max.  It’s getting crazy how big the difference is.

Now, the price disparity is not in everything, only in the products that do not originate from inside the yellow zone.  The increased price of the yellow zone goods transfers into the grey zone when the product is moved.  However, if the yellow zone and grey zone both produce an identical product (or service), that’s when you see the massive difference in price.  [And no, this is not a lower cost labor issue]

Conversely, prices of goods originating from the grey zone shipped to the yellow zone will be far less than the comparable product created from within the yellow zone.

What is going to happen?

I suspect we are going to import even more products from the grey zone at a greater rate, because there’s a lower origination price and greater opportunity for profit.  Wait and see.

China needs energy, Russia needs computer chips and tech.  They are trading thusly.  Now watch… if the sanctions are ever lifted, we will start importing Russian made electronic goods, because less expensive.  It’s nuts.

Remember, our ‘western’ government is doing this to us on purpose.

Dec 18 2023

Putin’s Four-Hour Press Conference


Posted originally on Dec 18, 2023 By Martin Armstrong 

Putin Political Cycle

Russian President Vladimir Putin believes his nation is leading the battle against Ukraine. In a four-hour televised press conference on December 14, the Russian president said he believes that the war will end once Russia achieves its goals. “Either we get an agreement or we solve this by force,” Putin stated.

Russia will spend $11 billion (1 trillion rubles) annually on maintaining reclaimed land. “Ukraine’s whole southeast has always been pro-Russian because these are historically Russian territories,” Putin claimed. “What does Ukraine have to do with this? Neither Crimea nor the Black Sea’s whole northern coast have anything to do (with Ukraine). And Odesa is a Russian city,” Putin said after announcing that Russia would not surrender any annexed land in Crimea, Kherson, Zaporizhzhia, Luhansk, or Donetsk.

Putin Economist

The televised event was the president’s first time addressing the public at large since February 2022, and comes days after announcing he will seek a fifth term in March. Putin took questions from the audience and journalists during the event. Some of the questions were pre-screened to allow Putin the opportunity to provide the public with the intended messaging. However, they also televised various text messages from the public that were critical of the government and world. “Why is your ‘reality’ at odds with our lived reality?” one message read.

The Russian people want the war to end as hundreds of thousands have already died. Putin claimed Russia does not plan to send additional troops into battle at this time, as over 600,000 are currently on the ground. He assured the people that better days are ahead, claiming GDP will rise in 3.5% in 2023 and unemployment will reach a historic low of 2.9%. One citizen asked about food inflation and cited eggs in particular as they have spiked over 40%. “I apologize for this, but this is a failure of the government’s work,” he stated. Inflation in Russia is running at around 7.5% despite the central bank targeting 4%.

ECM Ukraine 8.6 R

Now the people of Russia want the war to end and Putin wants to win the favor of the people ahead of the election. “There will be peace when we achieve our goals,” Putin again reassured the public. Yet, NATO chief Jens Stoltenberg made a speech around the same time urging nations to continue supporting Ukraine. Stoltenberg said that Russia will not stop at Ukraine if it achieves its objectives. “If Putin wins in Ukraine, there is real risk that his aggression will not end there. Our support is not charity. It is an investment in our security,” he said.

As long as the money continues to flow to Ukraine, the war will continue.

Sep 14 2023

North Korea backs Russia


Armstrong Economics Blog/War Re-Posted Sep 14, 2023 by Martin Armstrong

Kim Jong Un traveled to Moscow to show Russian President Vladimir Putin his support. North Korea is completely dependent on China after the hermit kingdom was shunned from global trade long ago. Russia’s support could prove vital to North Korea as reports of famine and hardship have made their way out of the secretive country.

Kim Jong Un said Russia will secure a victory over “evil” forces. “Russia is waging a sacred fight against the West,” he said, adding that North Korea will work together with Russia to “fight against imperialism.” Three generations of dictators have been focused on demolishing the West, accumulating military supplies, and militarizing the nation in preparation for an inevitable attack. The entire Korean peninsula will be up in arms if China, Russia, and North Korea begin performing military exercises together.

North Korea has nothing to lose, a dangerous enemy indeed, and needs this partnership with Russia more than Russia needs North Korea. Absolutely no one is willing to trade with the strict dictatorship, and they are wholly reliant on China. The nation only exists because it has nuclear powers that it threatens to use frequently. Russia will likely ask for military bases, equipment, and fighters. North Korea is seeking advanced Russian technology as the nation has faced numerous embarrassments after failed military tests. In particular, North Korea wishes to launch spy satellites but has failed on numerous occasions.

Kremlin spokesman Dmitry Peskov said that the details will be kept confidential. This partnership gives the West another reason to point its finger and say, “Those are the bad guys.” A grand-scale war is increasingly becoming inevitable.

Sep 7 2023

Oil Prices Surge After Saudi Arabia and Russia Announce Extended Oil Production Cuts Through End of 2023


Posted originally on the CTH on September 6, 2023 | Sundance 

Oil prices shot passed $90/bbl today after Saudi Arabia and then Russia announced a continuance of production cuts through the end of this year.

The BRICS alliance is going to deliver some pain to the Western alliance.  Those people living in the yellow zone, with leadership chasing climate change and Green New Deal policies, are going to see more durable inflation as the cost of oil is attached to just about every product and service.

Gasoline, energy products, petroleum products, home heating oil, groceries, everything will cost more as the geopolitical battle continues; but we are supposed to pretend we are unaware of the global political dynamic.

(Zero Hedge) – […] Just after 9am ET, Saudi Arabia said it would extend the voluntary cut of 1 million b/d of for another 3 months, from October until the end of December, well beyond the expectation of just 1 more month. Saudi press agency SPA notes that the voluntary cut decision will be reviewed monthly to consider deepening the cut or increasing production.

The extension of cuts is meant to reinforce the precautionary efforts made by OPEC countries with the aim of supporting the stability of the oil market. The Saudi announcement came a shock to market as 20 of 25 traders and analysts surveyed by Bloomberg last week had predicted the additional cutback would be continued for just one additional month.

And then, literally seconds after the Saudi decision, Russian deputy PM Novak said Russia would also extend its reduction of oil exports until the end of the year, reducing its oil output by 300kb/d in voluntary cuts until December 2023.

Similar to the Saudis, Russia said that the decision to reduce oil production to be reviewed monthly to consider possibility of deepening reduction or increasing production depending on situation on the world market. (read more)

“The U.S. Strategic Petroleum Reserve is empty, my friend”… 

(Yahoo) – […] Higher oil prices are bad news for the world’s central banks, which have been trying to tame high inflation since last year. Energy is a key input for economic activities, so higher oil prices generally lead to inflation.

But Saudi Arabia and Russia’s keeping their oil supply cuts for longer means “they have no interest in what central banks are worried about,” Naeem Aslam, the chief investment officer of Zaye Capital Markets, wrote in a Tuesday note seen by Insider. (read more) 

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