Alert They Are Sending 50 Million Barrel Oil Bomb For 2020 Petrodollar Collapse

On the 20th of April of 2020, at around 2pm, something historic happened: WTI, short for West Texas Intermediate, crude oil futures traded at negative prices for the first time ever. From there, everything went downhill, and oil prices reached the impressive mark of negative $37.63 a barrel, which translates to a 300% crash. For perspective, this means that if you had bought the oil contract which traded at that price, you would have been paid $37,630, as the contract entailed the sale of a thousand barrels of crude. However, as expert Neil Irwin pointed out, “that is about five tanker trucks’ worth, so any joke about storing the oil in your basement will have to remain just that”.

The immediate reaction by many economics commentators to this bizarre event was to simply shrug it off as price adjustments to the collapsed demand for oil. Some also blamed it on lack of storage at the Cushing, Oklahoma delivery point. While this certainly isn’t false, it is a very simplistic way of looking at a complex market with many strong players. American and Saudi elites, in particular, have very significant stakes in oil production and market manipulation has become, over the years, a normal practice. In fact, meddling by powerful oil players is probably why most media outlets have not been very helpful in their reporting of the oil price crash. So, let’s take a serious look at what’s been happening in the oil market for the past few months, shall we?

Read MoreAlert They Are Sending 50 Million Barrel Oil Bomb For 2020 Petrodollar Collapse

The Looming $600 Trillion Derivative Crisis! Banks Have Been Trading Gold That Doesn’t Exist

 

The current situation has been taking a toll on financial institutions the world over. As the economy grounds to a halt, so do many of the daily transactions that keep money moving and ensure the balance of financial markets. As companies start massive layoff programs and furlough their employees, liquidity demand is rising to levels similar to those of long-forgotten bank rushes. In a bid to prevent widespread commercial bank failures and worldwide financial collapse, Central Banks are extending their liquidity facilities and slashing official interest rates. While this does help commercial banks with meeting their immediate needs for cash, it is nothing short of financial Armageddon for investment banks. However, because so many commercial and investment banks are intertwined, policy makers are faced with a situation where, no matter their decision, it will have a negative impact across the board. Whatever Central Banks do, or even if they do nothing at all, dire consequences will follow. In this scenario, their priority becomes damage control, as they try to choose the least harmful options in search of an appropriate balance. What would you do if you were a decision maker? Would you provide cash to hold off the collapse of commercial banks, or would you try to constrain money supply to save investment banks and financial markets?

Read MoreThe Looming $600 Trillion Derivative Crisis! Banks Have Been Trading Gold That Doesn’t Exist