Search This Blog

Thursday, December 18, 2014

Dropping Oil Prices; Dropping Rouble Value

When we wrote a couple weeks ago about the reasons gasoline prices were so low compared with just 6-12months past, a 25% decline per gallon, we presented many reasons among them the increase in fracking and basic Economics 101 supply/demand..

And all of which is still true..

One thing we didn't take into consideration on our reasoning..

The US' determination to cripple the Russian economy and punish it for taking back Crimea from Ukraine which the Crimean people wanted.

Of course the Sochi Winter Olympics didn't help matters; Sochi like ALL Olympic Games are a Complete waste of money for any nation hosting one
But of course the real culprit is manipulated oil price drops..

And when we don't get what we want politically, we don't take it too well..  We send drones and drop many bombs for small nations we find inconsequential.

And for the bigger ones with military capabilities able to match or surpass ours, we resort to things like economic sanctions, freezing bank accounts and working in secret with other oil exporter nations to agree to temporarily sabotage their price and profit margin in the short term

And Russia is a natural resource rich nation.. A large percentage of their economy stems from the selling/trading of those products to the rest of the world.
Now once the US feels it has punished Russia enough, it will allow Saudi Arabia, OPEC and the rest of them to make up the losses which means don't be surprised if gas is $5 next Christmas if for no other reason than to allow Big Oil to recoup all these losses they're currently taking.

Within the last year, the rouble has lost 50% value vs the US dollar pushing Russia to the brink of a currency crisis..

And when your economy is so closely tied to gasoline or 'petrol' as Europeans call it, and you right or wrong, make plans to build a massive oil pipeline between yourself and China that would not be based on US 'petroldollar' currency..

Well you can see how that would antagonize the US to do these spite moves which economists and political pundits would call a secret trade war.
And what does the US have to lose?  We really do not trade much with Russia..  It is the European Union which is far more dependent and economically tied in to the fluctuations in currency strength.

Within the last two days alone, the ruble's value has dropped 15% causing the prices of goods and services to spike and those in charge of Russia's Central Bank today raised interest rates to 17% to try to stem the tide and prevent massive bank runs and panic.

For a little perspective, the very best interest rate you can get anywhere in the US right now on a 5 year CD based on putting in between $50-$100k is 2.25%
Its funny how many people are annoyed and upset that the Guardians of Peace (GOP) were able to successfully sabotage Sony's release of their crap film 'The Interview' to the point last night Sony completely pulled it from being released..

Yet have no problem when we go in and sabotage a sovereign nation's economy in secret because we don't like that it thinks and acts independent of our will and want.

So what is ultimately happening and will occur is deep mistrust and the seeds of hate by Russia toward the West and vice-versa as Russia looks East and becomes more and more allied and dependent on evil China (They are considering bailing out the Russian economy)

And from this, you will ultimately see the world go back to another Cold War
All because Obama couldn't and wouldn't accept the will of the Crimean people to be re-united with their true home country, as we took the side of backwards Ukrainian neo-Nazi pigs in the US & NATO's desire to expand its defense systems closer to the Russian border.

Its a shame people can't hoard gasoline like canned food and bottled water because these gas prices, as wonderful as they are, are an aberration.