If Saudi Arabia keeps Oil Prices low, it’s a clear signal for Deflation: Minimized debts and Austerity Measures! – March 21, 2020,
Back in 2007-2008 the U.S market, the U.S housing markets and pretty much the entire global market crashed, during this crash the world had a great opportunity to restructure global debts and enter the technology era in which I assumed at that time would be a boast to smaller businesses all over the world.
Unfortunately in 2007-2008 Barack Obama was the President of the United States and he was able to pull off something no White Male or Female President would have been able to pull off. Democrat President Barack Obama bailed out Wall Street, he bailed out the rich, I personally think had Barack Obama been a white male he would have been killed.
Nothing so blatant had ever happened like that in the free world, it was blatant welfare for rich, it even caused March on Wall Street and spurred the Tea Party movement. Because most of the world doesn’t concern itself with economics, the Wall Street bailout coordinated by Barack Obama and the Federal Reserve not only kept interest rates at 0% it also created a term everybody is familiar with called Stock buybacks, basically inflating the prices of Stocks.
Everything in the U.S economy is inflated and Oil is currently priced in U.S dollars. Most people can see the U.S economy for what it is and it’s an economy that desperately wants to deflate, but you see there’s a problem with the U.S economy deflating and this problem is governments all over the world have gotten too big!
Because America is currently the world’s police force, the world is currently comfortable financing the U.S economy, long term this is obviously a horrible thing, but in the short term, it gives America the perks of maintaining a bloated Government.
Now, don’t get me wrong everything has it’s limiting if let’s say a Bernie Sanders type became the President of the United States, of course, the world wouldn’t allow Bernie Sanders to get away with his is proposals, but as long the President of the United States is competent enough to understand the relationship the world has with the U.S dollar well the empire America will be maintained.
With that said, the writing is on the wall, anyone with half a brain can see deflation in the future and Saudi Arabia is ahead of that curve. Saudi Arabia was asked to lower oil prices, Donald Trump the negotiation he is asked Saudi Arabia to keep oil prices low, Russia, however, wants Oil prices to be what it considers to be stable, the problem is Saudi Arabia can’t serve to masters and this balancing act they’re having to play I’m sure is very tedious, instead of wasting time catering to both America and Canada, Saudi Arabia at least temporarily is taking the lead.
Venezuela is yesterday’s news, Saudi Arabia is the only game in town today and at least for now and possibly for the foreseeable future, Saudi Arabia might drive prices down in hopes to eliminate its competition. Now, most people’s retirements are tied to the dividend-paying energy sector, the problem when you have a bloated government is that your bloated, unionized public-sector workforce doesn’t allow for price deflation.
One of the reasons people like me talk about abolishing the minimum wage is because most employees, don’t understand basic economics. Most people understand economics by way of the public education system, which the assumption is that wages and prices are supposed to rise, but what’s not understood by most people is that the entire concept of “wages” or a “wage” is a government creation, just like a “corporation” is a creation of government.
Who taught you to be entitled to a minimum wage? The government taught you that, who taught you that people should work for wages? The government taught you that, well, in the adult world the markets can deflate prices if it has the capabilities to do so, however, if your government brainwashed you into believing that they can control prices, well, then you’re only now comprehending how wars get started!
Entitlements create disillusion in the human mind and if a government preaches the same mantra over and over again, you may believe things that really aren’t true and when you believe in fallacies, realities will be hard for you to accept and this is why I’m giving you advice for a lifetime.
Austerity measures are something you’ll have to pay close attention too if there’s a market reset. If you live in a country outside of America, and your citizenry, doesn’t appear to comprehend that their government was built to handle austerity measures, well, you’ll assume that central banks can fix deflation by simply printing more money.
Deflation equates to working harder for market share, deflation benefits hard-working people, deflation is going to confuse many of you because deflation equates to you having less access to debt. In a deflationary environment, banks and financial institutions are more critical as to who they’re willing to lend money too.
Sure governments can promise banks this and that, but in a deflationary environment If you can’t create wealth wit money lent to you, what happens net is hyper-inflation. People who are currently retired are retiring off of cash-flow mainly coming from cash-flowing industries.
If the energy market shrinks because of the dominant player Saudia Arabia, money will flow into other possibly unproven sectors of the global economy, don’t forget that most companies are debt-financed, meaning most companies in the world are in more debt than their businesses will sell for.
In real estate, the fear of the bank is that the mortgages it holds will be more than the house will sell for, because in that circumstance if the homeowner walks away from the home, the bank is stuck with the depreciated asset. This is what deflation is and it worsens when a country has an entitled government workforce who assumes that the problem will be easily remedied by printing currency. This is why I say, deflation is already here, it’s just that most people can’t see it yet.
Will some countries make the mistake of printing too much money? Of course, some countries will do this, America might even do this, the problem is that base currency shouldn’t be confused with digital currency. Even Iran asked Obama for CASH! These world leaders aren’t stupid, I keep hearing people say why isn’t the price of gold rising? Because it’s already risen, what people aren’t factoring in is what’s going to happen to the prices of everything else.
Although the market has suffered record loses via the Coronavirus, I’m sorry, but we’re not done yet, our currencies are called PETRO-DOLLARS for a reason, it’s just that it takes some people longer to comprehend it! Plastics can last as long as Gold, have ever thought about that? Do you know the relationship between Plastic and Oil? If your government is anti-austerity measures, when the economy comes crashing down, you may want to consider abandoning the currency!
Interesting times ahead!