So Many Open Signs of Financial Disaster Ahead and Gold Working

From oil markets to treasury stacking, backdoor QE, investor fantasy and hedge fund prepping, it’s becoming more and more clear that the big boys are bracing for disaster as gold stretches its legs for a rapid run north. Recently, I dove into the cracks in the petrodollar as yet another symptom of a world turning its back on USTs and USDs. Gold, of course, has a role in these headlines if one looks deep enough. So, let’s look deeper. Diving Deeper into the Oil Story The headlines of late, for example, are all about “surprise” OPEC production cuts. Why is this happening and what does it say about gold down the road? First, let’s face the politics. As noted many times, it seems US policy, on everything from short-sighted (suicidal?) sanctions to the “green initiative” makes just about zero sense in the real world, which is miles apart from the “keep-me-elected” fantasy-world of DC. After all, energy, matters, which means oil matters. But the current regime in DC has been losing friends in Saudi Arabia and cutting its prior and once admirable shale production outputs (think 2016-2020) in the US despite a world that still runs on black gold fighting against green politics. The DC attack on shale may make the Greta Thunbergs happy, but let’s be blunt: It defies economic common sense. Saudi, by cutting production, is now showing a still very much oil-dependent world it is not afraid of losing market share to the USA in the face of rising oil for the simple reason that the USA just aint got enough oil to fill the gap or flex its energy muscles. In the meantime, Chinese demand for crude is peaking while Russian oil flows to the east (including to Japan) are hitting new highs at prices above the US-led price cap of $60/barrel. If DC has any blunt realists (wrongly castigated as tree-killers) left, it will have to re-think its anti-oil policies and get back toward that recent era when US shale was responsible for 90% of total global oil supply growth. If not, oil prices can and will spike, making Powell’s war on inflation even more of an open charade. Speaking of inflation… Read more…