People keep forgetting rule #1 of economics.

The first rule of economic policy is to make sure you do not run into acute energy shortages.

The second rule of economic policy is to make sure you do not run into acute energy shortages.

 

Energy gives currency value, not the other way around. This is the basis of why PoW > PoS. You can print money but you can't print molecules. All currency MUST be denominated in energy units when you boil down your capital energy cost = the EU is in deep trouble. https://twitter.com/JavierBlas/status/1575868144110936064

 

https://michaelshellenberger.substack.com/p/bidens-secret-promise-to-opec-backfires

 

Everyone has stopped playing the US Ponzi in the BRICS and OPEC +. They know the end is close. This is really what Ukraine is about. It is about continuing the Ponzi and not about supporting the NATO Nazi's in Ukraine that have enriched the Biden crime family.

Many find it hard to swallow that Putin is actually helping Americans end this Ponzi. I get it. But now you know why the DNC tried to link Russia and Trump with a dossier and why Putin invaded Ukraine. I'm not interested in optics. I am interested in why Putin is doing what he is doing and he is helping us end the crime syndicate in Washington DC.

 

If you want to know why bonds have sold off and why DXY looks high it is because global sovereigns bet wrong on hydrocarbons. Everything in my inflation thesis has come to fruition in 2021. Global hydrocarbon risk provides a longer straw than the dollar in the “milkshake” theory. This is why the bond market looks as it does today and why DXY looks strong when it's not. Oil is driving the story.

 

This thread gets a huge boost today from the FOMC press conference.
2011: fossil fuels comprise 82% global energy needs. 2011-2021: $3.8T spent on renewables. 2021: FF’s comprise 81% global energy needs. $3.8T for 1%. W/materials cost inflation & coal switching, FF use now likely above 82%. Energy density matters.

The era of cheap energy is over globally. All the things I saw in oil are manifesting now in inflation.

 

Diesel fuel is screaming higher again in futures markets today - -physical prices doing even better. With crude wobbling between $88-$96/bbl, the price of diesel varies from $140.28/bbl in Los Angeles to $195.30/bbl in New York. No break for inflation.

 

Globalization is over:https://twitter.com/1MarkMoss/status/1600505233674801152

Now we need to see NATO & the WEF end. Both institutions supported globalization.

 

“Nothing is more powerful than an idea whose time has come.” -Victor Hugo

The US cannot afford its debt, Entitlements, & military without negative real rate USTs…but only a fool would settle (oil) surpluses in negative real rate USTs. Putin, Xi, & MBS are not fools.

I have a sense in 2023 many will want to use gold to buy oil but they will realize quickly that Bitcoin is a better way to move value.

 

Just how bad is energy policy in Europe? China to build 150 new nuclear reactors worth $440bn in the next 15 years. This is more than the rest of the world has built in the past 35 years. This is roughly what Germany has spent to make it through this winter. This is a warning for the coming currency/credit crisis coming at you like a freight train running away.

 

Oil is going higher from where it is today. Despite WTI averaging $95/bbl in 2022, O&G market volatility + changing mindset around FCF allocation = FID (final investment decision) of only 20B boe last year. The world now consumes 60B boe per year, meaning we have been in investment shortfall for 9 years running!