This crisis won’t end, and the oil market as we know it is never coming back
With oil no-one needs spilled everywhere, the Colossus of corrupt crony capitalism has slipped on its feet of clay. It’s never getting up – to prosper in this new world, you’ll have to abandon the winner-takes-all mentality.
Yet, the current mess has further exposed that the entire structural artifice of the global oil market is irreplaceably broken – and therefore meaningless in terms of making useful forecasts.
Meaningful price-discovery in the oil market is never coming back because the entire industry of this physical commodity has been replaced with ersatz derivatives and financial chimeras that only exist to enrich bankers – and no regulator in the world has the power to stop the hyper-financialization insanity.
Indeed, the current negative prices for oil are a direct result of unchecked money-printing that has created a black hole of debt, which is now sucking up huge chunks of the global GDP.
Also on rt.com ‘Tables turned’: Investors who dismissed gold as ‘useless pet rock’ now see it as asset during coronavirus crisis – Max KeiserWe have now entered a new post-globalization, post-crony, capitalist era of hyper-localism, where regions of self-sufficiency replace the system of just-in-time globalization which had been built on artificially cheap credit at the command of supranational bureaucrats and venal plutocrats.
Ultimately, the winners in this new world will be groups with the lowest expectations about how much wealth they can illegitimately extract from their community. The losers will be those that cling to the legacy orthodoxy of winner-takes-all at any cost.
The brent crude price fell below $16 per barrel this week for the first time since 1999 – but even before the Covid-19 pandemic hit, the world was already caught up in a Saudi-led price war, the goal of which was to destroy the US shale industry by flooding the globe with $5-a-barrel oil.
So far, their plan is working. Global GDP is plunging and America’s over-indebtedness is being exposed as a horrible, existential liability. Some could argue this is Phase Two of the Saudi assault plan.
The crisis won’t end. Instead, it will transform as we move from the unsustainable model of cheap-credit-fueled globalism to a new localism based on Hard Money like Gold and Bitcoin. This will profoundly change our lives, our values, our institutions, and our sense of self.
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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.
