It’s not crude to protect the American consumer

In the last three months crude oil has soared 18.6%, while the S&P 500 and the 10-year bond are flat.

But why is that the case? Please don’t give me the old “summer-driving season”.

The United States is fast becoming the largest producer of crude oil in the world, ahead of Saudi Arabia and Russia, according to the newest EIA report.

Yet the difference between European Brent Crude and West Texas Intermediate crude is only $3 a barrel. Surely that spread needs to be much wider given the Iranian sanctions.

While the White House is pressuring Saudi Arabia to make up the shortfall of Iranian production, it needs to get a handle on domestic production to curtail rampant price hikes, which amount to gouging for US suppliers, since they are not selling large quantities on the international market.

If the 1970’s and 1980’s were about OPEC dictating price and supply, the 21st century should be about our energy independence and a domestic price suiting that situation.

If American crude producers can survive on $50 a barrel, then why let crude trade here for $70 a barrel?

The higher price only emboldens countries that despise us to gather more profits in order to fund operations against us, while wiping out any monetary gains Americans might realize from slowly rising wages.

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Bitcoin: Digital gold for troubled times

Bitcoin made another 10+% jump on Thursday to bounce off of $7,998.

While the news coming out during the day was good for the crypto with financial forms lining up to get behind bitcoin, there is more to the 30% price rebound over the last three days than what’s out there. Continue reading

Saudi ‘reverse coup’ bolsters bitcoin, while dollar forex, crude may crater

Bitcoin soared past $7,600 in early Sunday trading as news came out of a Saudi Arabian crackdown on the royal princes in a consolidation of power for the new king.

Among the 50 royals detained on Saturday evening was Prince Al-Waleed bin Talal, the billionaire investor behind Twitter, News Corp. and Citigroup. Continue reading

How the Saudi's won the non-release of 9/11 documents

What was the impetus behind the White House meeting between President Obama, Vice President Biden and Fed chief  Yellen and the two special expedited Federal Reserve meetings late last month?

My hunch is it had everything to do with Saudi Arabia and its reaction to the possible release of 9/11 documents formerly redacted from official reports.

The Saudi’s with more than $750 billion in Treasuries sitting on their balance sheets probably threatened to create a fire sale by dumping our paper on the market, which would have cratered equities and bond prices across the globe.

We know the Saudis are desperate for cash after seeing oil prices suppressed for so long that they are looking to sell a 5% stake in Aramco — the crude oil production arm of the country — for $100B to most likely the Chinese.

We also know that all these meetings did not revolve around the statement or actions the Fed made at its April meeting. Both the no rate rise and the forward guidance were well anticipated by the markets.

So the only reason for the White House — sans Treasury Secretary Lew — to get involved was if national security was on the table.

It appears the Saudis won the bluff by going all in on Treasury bet, since we have not heard anything further on the matter of releasing the documents.

Saudi's US grip is more than oil

Crude oil prices cratered 3% overnight paring earlier losses as OPEC and Russia failed to agree on cutting output to support higher prices in Doha talks.

Equity markets across the globe sold off on the news that the collusion between the oil-producing monopoly and US and Russia broke down.

Into this backdrop we have other news coming out of Saudi Arabia.

The Saudi royals are threatening to sell of their 4% stake in US debt, should a bill make it through Congress, that would allow families that lost loved ones in the 9/11 attack to sue the oil-rich country over its role of financing the terror attacks.

The Saud family holds nearly $1 trillion in US government securities, which it threatened to liquidate in a fire sale to avoid having the cache attached to a survivor lawsuit.

The bill, co-sponsored by New York Sen. Charles Schumer, would remove immunity given to a foreign nations if the country’s government is found responsible for a terrorist attack on US soil — which could make the Saudi government vulnerable to a federal lawsuit by the families of 9/11 victims.

At the heart of the matter is a 28-page report detailing the Saudi’s financing of the terrorist plot as well as fanning the jihadist fervor with recruitment and organizational support prior to the attack.

Much of the complicity between the White House and the Saudi government has been laid out, such as the Saudi’s being able to fly hundreds of its citizens out of the US on 9/12 and 9/13 despite there being a no-fly order for all others.

So this is what we get for shipping trillions to a sand pit in the Middle East. And the fact that these deceitful people colluded to raise oil prices to gouge more of our money is sheer lunacy that we put up with it.