If You Think Corona Virus is a Threat
Wait until you feel
the effects of the Saudi Arabia/Russian oil flood. For over 40
years, the sale of U. S. oil to foreign buyers was mostly banned.
This was in part, an effort to preserve the national oil reserves,
and assuage those that feared exhaustion of domestic oil.
This fear also
spawned myriad environmental regulations that morphed from protecting
oil reserves to protecting the climate. These regulations severely
limited domestic oil production and exploration, making the United
States more and more dependent on foreign oil. For decades, the U.
S. was fleeced by the OPEC countries that limited production to keep
oil prices high, while billions, perhaps trillions, of U. S. dollars
flowed into the economies of these oil rich countries.
Finally, in the
second decade of the Twenty-First Century, thanks to new technology
and political persistence by oil companies, the U. S. achieved oil
independence. Oil prices dropped. Americans were freed from the
yoke of OPEC. Not only did the U. S. become energy independent, but
it was determined that the U. S. had the largest known oil reserves
and had become the largest oil producing country in the world. The
possibility of an oil economy no longer controlled by the Middle East
“Robber Barons” was within grasp. But the Globalists among us
were not happy. The particular reasons I do not know, but it is
reasonable to think they all involve money.
In January, 2016,
under the Obama Administration, restrictions on U. S. oil exports
were lifted and U. S. oil began flowing to foreign nations. While
this may, at first, seem to be a good economic move because it opens
foreign markets to domestic oil producers, the down sides are that it
ties domestic oil prices to foreign oil production, and makes the U.
S. a competitor in world oil markets. Even more problematic is that
this move made the U. S., once again, vulnerable to market
manipulations by OPEC.
In recent weeks,
while the media focuses on Corona Virus, the price of oil is dropping
daily, as Russia and Saudi Arabia are in an advertised battle, to see
which of them can produce the most oil. The increased production
naturally lowers the price and because U. S. oil is tied to world
prices, Americans are enjoying the lowest gasoline prices in years.
While this feels good for the moment, be sure there is a price to
pay.
Earlier in this
writing, I used the term, “Robber Barons” because one of the
schemes used by the original “Robber Barons” was to lower the
price on a product until the competition was forced out of business,
and then, having a monopoly they could charge what they wanted.
Foreign oil
producers can survive on lower prices, simply because U. S. oil
producers have higher production costs. If the world market oil
supply continues to increase, the price will continue to fall, and U.
S. production will cease. When U. S. production ceases, OPEC will
again own the game and prices will skyrocket.
While the media
focuses on Corona Virus, our economic enemies are plotting our
economic downfall and Washington seems oblivious. Remember, when the
price of gasoline triples that “Washingtonites” don’t buy
gasoline. Their cars, chauffeurs and fuel are provided by the
taxpayers that have no say in the “global economy.”
Jim
www.jim-mac.com
