iran oil OPEC

One Bank’s $30 ‘Uber-Bearish’ Oil Scenario And A ‘Worrying Asymmetry’

It's not "crazy".

It's not "crazy".
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3 comments on “One Bank’s $30 ‘Uber-Bearish’ Oil Scenario And A ‘Worrying Asymmetry’

  1. No, not crazy. To parrot Artie Johnson, “A velly intelesting qvestion.” But let’s take it one step further. Russia is China’s largest and friendliest supplier of oil ($37.9 billion according to Daniel Workman) and could probably participate with a few other nefarious oil exporting partners (like Angola, Venezuela and Libya) to make up any oil import deficit that might be occasioned by a shortfall from Iran (#7 supplier $15 billion) due to a US blockade..

    Second, let’s say that China decides to sell a large portion of its $1.8 trillion investment in US Treasuries. Ceteris paribus, treasury bond values fall and treasury yields/interest rates rise at a time when the US economy is already beginning to slow. Goodbye Fed put, hello major recession. US budget deficit soars from higher debt servicing requirements and lower tax receipts. China further manipulates downward the value of the yuan to remain competitive in international markets.

    Third, let’s say that China (world’s #1 producer of gold) uses some of treasury sales proceeds to buy even more gold (now about 1,864.3 tons), and colludes with Russia (#3 producer), Indonesia (#7), South Africa (#8) and several others to agree that dollar is no longer necessary to pay for international trades in oil and other most basic commodities. Goodbye Bretton Woods, hello perfect storm of economic warfare. No, not crazy.

    • The way to avoid this “fringe” scenario would be for Congress to reassert its Constitutional responsibilities under Article 1, Section 8, Clause 1 and remove the tariff dagger from the madman’s hand. Then file the Articles of Impeachment.

  2. Mitch… where are you??? Has anyone seen Mitch???

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