The WEST has implemented a PRICE CAP on oil/barrel which they think will sanction Russia and reduce revenue for Russia's war with Ukraine. The $60 price cap is a complete joke IMO as the free market will destroy this idea (as it has done previously many times). Nixon tried price controls, Ford also tried to control inflation with his 'whip inflation now' strategy. These policies were destroyed by our markets and I predict the SAME will happen with this $60/barrel price cap.
What is likely to happen is that prices will INCREASE over time as a result of this foolish strategy. Russia says they will ignore the CAP and sell to those who honor the market price. I think this will happen. It is possible that prices could decline over time if our economy crashes. But if this does not happen then I would expect oil prices to INCREASE over time (given this foolish policy).
We now live with many foolish economic policies which can not work in the longer run. The BIG change occurred in 2008 with the change to electronic money (also called computer/digital/virtual money). This change from prior economic history has allowed computers to manipulate all of our markets. I watch the algo's manipulating prices daily on my Smart Phone. You are probably doing similar. We will soon have a CASHLESS world and VIRTUAL currencies (globally). Our elites desire this event (so it seems)!
I find these 'virtual' currencies creating a corrupt system as it allows our Central Banks to rig the markets via their 'control computer' system. The High Frequency Computers at the FED can over-ride all the trading done by retail traders (with their computers). It's a corrupt system and it now appears that our Central Banks will RULE over all economic decisions going forward.
A few elites (behind closed doors) will run the financial system. Our private free market system is now (mostly) done. Socialism and Communism is the trend in economics. Biden is promoting Socialism. The WEST wants more central control. This mindset leads to Socialism and eventually Communism. History is my teacher on this issue. Does China provide us with evidence on this issue? I think so! Xi wants total control. This is the mindset which evolves when central planning is implemented.
The American financial house of cards is BEYOND salvation IMO. Our debt can never be repaid. Our politicians continue to spend money with no regard for our children's future. At some point this system must BREAK and crash. It's merely a matter to a few days/weeks/months. Manipulation by these elites will eventually be over-ruled by the markets. Computers at the FED can not win forever. A day of reckoning must happen at some point. When? My sense is in 2023.
Virtual money and computer manipulations will eventually be rejected by the markets. As prices get more distorted traders will reject the system. I see this happening to some extent already. The FTX trading scandal is one example. Later in 2023 we could witness a housing crisis. These higher interest rates are taking a toll on prices for real estate. This will eventually bring us a HOUSING CRISIS (similar to 2008). Probably in 2023. My area is already slowing down and some prices are declining!
Electronic trading was the BIG change which produced today's economic distortions. The change to computers as trading tools for price discovery was the BIG change. The private OPEN OUTCRY trading system was eliminated and this allows computers to RULE over all our markets. Today, the 'control computers' at our Central Banks RULE over all our markets. Free market price discovery is now OVER! This PRICE CAP policy of the WEST on Russian oil is another example of what has evolved since 2008.
I fully expect MORE foolish economic policies going forward. The Mark of the Beast financial system is soon coming. Personally, I will reject this system when it fully arrives. The 'harbingers' of this corrupt system are here now but the FULL kahuna is still on the horizon. It may be time to think of BARTER as a viable trading system. I also think that buying some gold/silver coins is a wise policy. At least these coins are physical (not virtual units of nothing). Think for yourself, however. The above is my point-of-view!
I am: Donald B. Swenson, Economist/Philosopher, donaldswenson.blogspot.com. Also, http://kingdomecon.wordpress.com.
No comments:
Post a Comment