"Oil" by Katie Mae Dickinson on flickr

"Oil" by Katie Mae Dickinson on flickr

The hypocrisy,addiction,and corruption associated with the usage of fossil fuels, in particular oil, is brought out in this article.

(‘TIP’; click on full screen so that you don’t wear your eyes out viewing the article)

“It is notable that when people talk about oil having hit its ‘highs’ of $140 back in 2008 and now trading almost 40% lower they are referring to the price of WTI, which has tumbled back into the $80s, but both Argus Sour Crude (left, top) and the more ubiquitous Brent Crude (left, middle) contracts are still trading within shouting distance of their lifetime highs. The bottom chart shows how Brent and WTI have disconnected from an almost perfect correlation EXACTLY at the time QE2 was announced back in August of 2010 – not that Quantitative Easing is in ANY way responsible for an increase in the price of commodities of course. I want to make that QUITE clear….

Naturally, it is useful when one is in the business of managing an economy and attempting to control inflation while simultaneously printing as much money as one can get away with, to be able to point to a falling oil price as evidence that the dreaded spectre of inflation is not an immediate concern and the weakness in WTI has afforded the US government and their Central Bank sidekicks the luxury of being able to do that, but the stubbornly high price of Brent is becoming something of an irritant.

Back in June when the IEA announced they were releasing 60 million barrels of oil from OECD inventories due to the high price of crude, it was suggested that the main reason for such an action was the loss of oil production that accompanied the beginning of the popular uprising against Colonel Gaddafi and a look at a chart of world oil production (below) shows just how severe a drop-off in price the unrest in Libya caused. What is even more interesting, however, is the chart that follows, which shows Saudi oil production levels at the time of the virtual shutdown of Libyan oilfields with the March data for both countries’ output circled. Clearly, Saudi Arabia was either unwilling or unable to plug the Libyan output gap:

“The signs are clear: Inflation is not only the preferred option to soothe the pain of a world drowning in debt, but (semantics about which ‘oil price’ to use aside) pretty much the only bullet left in the guns of central bankers and, until somebody stamps a ‘sell-by date’ on such things as copper, oil or our old friends gold and silver, the Chinese will continue to swap their paper for hard assets and, realistically, the price is of secondary importance to them. ”

And that only goes to show how the MOTU’s are caught up in their own FAILED macro economics.

Read the whole article to see how you’re being played; I found this to be laughable:
US Constitution with all 27 Amendments: 7,818 words
EU regulations on the sale of cabbage: 26,911 words