Aired on the Doomstead Diner on December 3, 2014
Discuss this Rant at the Podcast Table inside the Diner
…It has been patently obvious for quite some time that the Saudis cannot increase their production further, they are flatlined. Neither can they cut back, because they have a lot of folks ready to riot if they gotta cut jobz or cut subsidies. By no means did the Saudis plan for or instigate a price fall down from $90, they like high prices as much as any Oil exporter does. This does however give them an opportunity to put competitors outta biz. Issue there is who can outlast who and for how long?
One of the better theories floating around is that the price drop was instigated by the end of QE from Da Fed, and the theoretical end of EZ financing for White Elephants. As a trigger mechanism that is probably true, but the underlying problems have been building steadily since the last crash in 2008, when in order to “save” the banking system, enormous bailouts were issued to the TBTF Banks, along with assorted other companies deemed TBTF, like the auto companies, insurance companies, etc.
The means by which they were bailed out was of course, DEBT. What a bailout amounts to is taking the bad debt of a large corporation, buying it all up at par and dropping it on the balance sheet of Da Fed, with the US Taxpayer then theoretically on the hook for this. The bailed out company now has a load of fresh cash, and Da Fed has a load of dogshit on its books…
For the rest, LISTEN TO THE RANT!!!
Upcoming on the Diner, the SEQUEL to our Oil Crash Analysis, with the Usual Suspects involved. Stay tuned to the Diner for the Air Date. If you missed Part 1, here it is again:
Constipation has hit the SKITTLE SHITTING UNICORNS