Published: 10:49 AM, Mar 31, 2022
I am reading that Biden is going to release oil from their reserves, about 10 days worth. The BBC report claims...
...that this has reduced oil price by 6% but I'm not so sure it has directly and exclusively resulted in the drop, the last time they released reserve the effect was minimal and didn't last long.
Certainly, the oil price has been volatile, and this drop is pretty small compared to drops in the last month. Of course they will claim credit and when the price goes up in the next week everyone will act confused.
The intention was to turn the rouble to rubble with economic sanctions but after a steep drop in value it is right back to where it began. I mean, was this not something that would obviously happen? Did nobody think this through?
I speak often about how the next few years are going to be about having tangible assets that will grow in value when inflation is soaring. Russia has a lot of this in the ground. Any attempt at crashing their economy when they hold such a massive oil reserve was a naïve plan doomed to fail.
On a matter as serious as war we need to know what we are attempting to do will work as intended. We thought sanctions would end the war and it clearly has done little, if anything. We need to analyse how shallow our moves ahead are and why we got this wrong so spectacularly.
One thing I note about oil producing countries is that once you discount them then there are very few countries left that achieve economic balance and democratic freedom. Maybe 6 or 7 European countries. We hand out pass marks to a lot of places because they still have a supply of oil, they can leverage to give a Potemkin modernity to their civilisation.
We really need to work out how to achieve modern life without oil fast because when the oil does run out the world will go bad really quickly.