Sunday, December 7, 2014

Why Has the Price of Oil Plunged?

The recent plunge in the price of oil is rather unexpected, but much debate has ensued as to why and to whose benefit is the price collapse. We believe that it is ultimately to America's detriment, and thus engineered outside of the United States.
The price of oil hit 150 in 2008 before dropping like a lead balloon to 40 only to rebound to 105-110 before taking another downward slope to around 65 USD/bbl. The gyrations are quite remarkable, reflecting to some degree effects of the economic depression.
But not even the economic depression of 2008 and its ensuing "green shoots" explain the price of oil, a mechanism which is somewhat immune to the laws of supply and demand. Like precious metals, oil prices are actively manipulated by the globalist banks operating under the control of the Federal Reserve. Speculation, in other words, has accounted for 20-50% of the oil price.
Recently that support has been removed, yet we are unable to explain the pathways through which it has been terminated. It is no secret that the world has seen a glut of oil since at least 2011; yet the price remained stubbornly high due to bankster interventions.
However, within the last several weeks, the price has fallen to around 65 USD/bbl in part a reflection of the economic realities of the past 6 years. If you are like the Ziocon whores of Investor's Business Daily who think that the economy is surging because of large hiring numbers, we urge you to examine the quality of the jobs. They are generally low rent minimum wage type jobs, with the higher paying ones in the 20-35,000 range - hardly the stuff of economic strength or optimism.
Some have opined that the price drop of oil is due to the United States' engineering the decline to cause economic damage to Russia, a nation which the Rothschild Ziocons in Washington are hellbent on destroying for absolutely no justifiable reason.
However, some observations by Dr Jim Willie have caused us to reconsider that position. In the first place, the current price of oil undermines the shale industry in the United States which undermines the financial viability of the billions of dollars of shale projects undertaken within the last 5 years. The idea that oil will rise soon seems undermined by the Saudis who have declared that they are comfortable with oil at around 60 USD/bbl.
The longer oil remains at these depressed rates, the more vulnerable become the junk bonds financing the shale projects. Seventy five dollars was considered the breakeven threshold, and with the heavy capital requirements of shale production - much higher than traditional sources and with much lower net energy harvests - the less likely financiers will fund ongoing production to say nothing of new projects. So in our view, this sector of the oil industry is in for significant reality readjustments and many bankruptcies.
These bankruptcies will threaten the already insolvent banks, causing cascading failures among them. Yet this is not the real problem with lower oil prices.
While lower oil prices will benefit many sectors of the US economy, the US government and its criminal Federal Reserve will face significant problems with the lower volume of dollars flowing into US treasuries.
The petro-dollar protocol established by Rockefeller Satanist Heinz Kissinger in the 1970s recycled billions and trillions of dollars back into the US treasury which allowed the US to run endless and gargantuan budget deficits. In fact it was the Rockefellers who engineered the OPEC oil cartel and the abrupt rise in the price of oil during the 1970s. The massive inflows of money allowed the US to engage in massive military expansion and wars of imperial aggression.
The US Fed has failed spectacularly with its plunderous Quantitative Easing which  transferred trillions of dollars from Americans to its elite .01% Ziocon criminals. But the real problem is that the Fed has fewer dollars with which to buy back treasuries which foreign entities are maneuvering like mad to dump.
Recently the Fed has ordered the Japanese to empty its retirement funds to pay for Fed crimes and QE, a certain sign that the US financial system is on its last leg.
In short, lower oil prices certainly hurt the Russians, but the pain is far greater to the US in that its nascent shale industry is about to be downsized, and the US government will see far fewer dollars recycled into US debt. With trillion dollar deficits as far as the eye can see, this will pose quite a challenge.
When the Saudis and Russians open oil purchases in Yuan, gold, and other currencies, the fat lady will have sung her opening notes.

Copyright 2014 Tony Bonn. All rights reserved.

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