Contriving Smart 12/25/2014
As we approach the end of 2014 we might consider looking at one of the major mis-steps that I made throughout this past year. I had forecast a major increase in hyper-inflation beginning in July of 2014 and continuing into 2015. All of the flags were present.
The Federal Reserve ignored the drought conditions of the Southwest, they ignored the sell-off of cattle in south and west. The Federal Reserve also continued to look the other way at foreclosures, even though they slowed down, they were still occurring at alarming rates through the first two quarters, they refused to include the pricing of petroleum and food staples in inflation numbers presented to the public to maintain their lower expectations of an inflation number of 2.5%.
As these costs to the public were rising, in general, food staple costs rose 7 to 12 percent in 2014. Petroleum crude oil barrel prices were stagnate at $111.54 throughout the year. This equates to an average gasoline cost of $3.48 (not including State Sales Tax) per gallon to the consumer at the pump. Now, looking at back at this price in July as I had forecast, and looking at to today’s pricing of $1.99, add that amount back into the pocket of every American pocket and look at what it can do to spur growth in our local, state and national economy. It has the ability to make me look very foolish and very Wrong!
So, my concern in my evaluation was, “Al, what did you miss? What sign, what flag was hidden from you that you missed? You were in London when China sign the Banking bill to open their new bank by-passing the US, shutting out the US Dollar as the Reserve Currency. What did I miss? This was huge, China was opening banks around the financial centers of the world and denying the US Reserve Capital income in the hundreds of billions of dollars that could have a devastating financial impact upon our economy and send us in to a spiraling inflationary cycle as “I” was predicting……
Well, I figured it out, I resolved the mental crisis, I got it a few weeks ago, I observed it, I knew, I just did not take its full weight into consideration. It happened On March 17, 2014, with President Obama issuing Executive Order 13661. Within the order, the President virtually wages economic war upon Russia’s Petroleum Industry and its Ruble, the order states in brief:
“..14 defense companies and individuals in Putin’s inner circle, as well as imposed targeted sanctions limiting certain financing to six of Russia’s largest banks and four energy companies. We have also suspended credit finance that encourages exports to Russia and financing for economic development projects in Russia, and are now prohibiting the provision, exportation, or reexportation of goods…”
The order goes even further and attacks the Russian Federation’s ability to develop and bring petroleum to the global market by sanctions in stating ;
“..exploration or production for deep-water, Arctic offshore, or shale projects that have the potential to produce oil in the Russian Federation, or in maritime area claimed by the Russian Federation and extending from its territory, and that involve five major Russian energy companies…”
This singular action in conjunction with the other G-7 nations of placing these sanctions upon the Russian Federation set the wheels in motion for a global economic rebound that benefits those of wealth and trickles down to the masses like snowflakes on a Christmas day.
So you may ask, “Al, give me a break, how does this impact US/Global gas prices and improve our economy…”?
Well over the period of a few quarters, it has demonstrably impacted us very heavily in this manner and history proves it. In the fall of 1991, then President George Bush (41) along with Federal Reserve Chairman Alan Greenspan created roughly $240 billion in bonds in an effort to buyout the Soviet Union as part of a broader program of ending the Cold War via an attack of the economy on the former Soviet Union. Hind sight shows, President George H.W. Bush had initiated a number of related covert operations to takeover certain sectors of the Soviet economy such as: “energy companies, banks, suspended credit finance, prohibiting the provision of exportation, collapse of the ruble, so Moscow faces the specter of depression…”.
At this time Vladimir Putin was KGB and very good friends with former CIA Director, former Ambassador to China, former Vice President of the United States , still Oil Tycoon, and the then, Current 41st President of the United States George Bush. He helped with the overthrow of Chairman Gorbachev and to put Russian oil tycoon Mikhail Khodorkovsky in prison in early 2003. This allowed for them to take control of the vast oil, gas fields and reserves of the then Soviet Union allowing Exxon-Mobile and Chevron Texas to take very sizable controlling interests of these resources through some very shady price fixing arrangements involving various shell companies, financing agents from locations such as: Cyprus, Isle of Man, British Virgin Islands, Turks and Caicos Islands, and other offshore tax havens.
BY taking control of these highly productive wealth centers, President Bush (41) and Federal Reserve Chairman Greenspan were able to virtually liquidate the financial center of the Soviet Union within one (1) year. They reduced the Ruble value by over 80%, drove the Soviet economy in to a spiraling hyer-inflationary state, thus bankrupting their military economy by effectively removing the very resource that allowed them to move and transport product, “Petroleum”.
Today, this is exactly what the Obama Administration is doing in conjunction with the G7 powers. They are effectively waging economic warfare upon the Russian Federation under the guise of the Ukraine incident.
The benefit to the world is that by attacking the Russian Federation Oil & Gas Industry, it simply lowers the global price of petroleum by inserting a glut of petroleum into the reserves. In other words, we have an oversupply in the demand equation. This implies directly that prices must go down to maintain a competitive environment.
The people win by default (temporarily for the time being, “trickledown effect”) by having lower prices and more disposable income in their wallets for the time being. The smart person will use this money to pay-off or reduce debt load as opposed to spending on wanton desires or be hooked into holiday spending.
I will have more on this topic in the coming days and weeks. But I wanted share my mis-step, clear the air and let you know what is taking place and not be mislead by the wild storied that the “Economy is finally making a comeback”!! This is far from the truth. Inflation is still with us.
Prices have risen in 2014 on average 7%. FritoLay prices are up almost 20%, Dairy 12%, Canned Goods 13%, Produce 18%, until December Petroleum was steady at $3.22 (depending upon State Sales tax), Property taxes were rising at 5%, and Savings were a mere $0.02. Wow, but, banks still charged upwards of 15% to 18% on credit cards, 8% for car loans, 4.2% for home loans and foreclosures continued but at a lesser pace, but they were still happening, the news media just did not cover them as well.
Lastly everyone is talking about how well the market is performing (NYSE). It is performing well, over 18,000 points!!! Yeah, for the very wealthy, BOO for the 79% of the population that is not in the market. That is correct, How many of you actually “personally own stock? How many you buy or sell stock yourself? Not IRA’s or Mutual Funds, 401k’s, but personal stock ownership? That is what I am referring to. The market is paying big to those able to personally participate, and it is not the small investor that is making out so well, most of the small investors are breaking even or losing according to ‘smash reports’. The big Investor is the winner right now. And, Win he/she is. Do not be misled by the media on this. Unless you understand the market, players, who, and where the growth of the market is taking place, do not get sucked in.
It appears that most of the gains are going to those that know about what is taking place with the Russian Federation and the Gas and Oil Industry, Certain Financial Sectors and of course the everlasting Military Industrial Complex. But, if you do not know who is getting what contract, you do not know who’s stock to purchase in advance (something called ‘legal insider trading’)………..
This is what is going on. Beware of false flags. We are in a false bubble right now. The sanctions are working exactly as the G7 hoped. The only thing that will change this is if China props up Putin’s Federation. I have observed stranger things. If China needs petroleum, they might do it. But, our economy is not on the rebound, this is only a band aid and Congress has nothing to do with it. Congress may however mess it up if they are not careful.