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The Massive Coming Oil Shock

$10 per gallon gas within two years? Quite possible.
Friday, December 15, 2017, 6:41 PM

Executive Summary

  • Why America Will NOT Soon Become A Net Exporter Of Oil
  • The Gross Global Mis-Pricing Of Risk
  • The New Fed Looks Even Worse Than The Old
  • What You Should Do To Prepare

If you have not yet read Part 1: The Great Oil Swindle, available free to all readers, please click here to read it first.

The "America Will Soon Be A Net Exporter Of Oil" Big Fat Lie

This brings us to the part where the oil myth has gone entirely off the rails.  Using the fraudulent oil recovery (EUR) estimates in play, the International Energy Agency (IEA) has built that into an outlook that might not only be wrong, but decisively and destructively wrong.

The IEA came out with a bombshell report recently that dramatically claims the US will not only become a net oil exporter in 2025 and remain as such for decades afterward, but that it will be able to increase its production by another incremental 8 million barrels per day above current levels:

US will become a net oil exporter within 10 years, says IEA

Nov 13, 2017

The shale revolution in north America means the US is destined to become a net oil exporter within 10 years, for the first time since the 1950s.

The International Energy Agency said it expected that American oil production between 2010 and 2025 would grow at a rate unparalleled by any country in history, with far-reaching consequences for the US and the world.

The last time the US exported more oil than it imported was 1953, and a ban on oil exports was lifted only in 2015.

Technological developments in drilling and fracking since the turn of this century have unlocked huge reserves of gas and oil trapped in shale rock, and redrawn the energy landscape.

(Source)

Well, I can assure you that if the IEA is using EUR’s that are off by 100%, then its projections are not only laughably wrong, but extremely dangerous.

Based on this sort of deeply-flawed analysis, anybody making plans off of this, which might include politicians, regulators, companies, or individuals deciding on whether or not to buy that F350 truck with a 15+ year lifespan, is relying on some very bad information.

And more than that, it's critical for us to understand how oil is about to violently... » Read more

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momtastic.com

Off The Cuff: Are We About To See Taper Tantrum 2.0?

The Fed wants to tighten. Will markets stand for it?
Thursday, December 14, 2017, 12:16 AM

In this week's Off The Cuff podcast, Chris and Axel Merk discuss:

  • Taper Tantrum 2.0?
    • The Fed wants to tighten. But can it?
  • Bad Balance Sheets
    • Can central banks simply hold their bad assets forever?
  • The Flattening Yield Curve
    • A classic signal of approaching recession
  • Bitcoin
    • Trying to make sense of the recent run-up

Recorded before today's FMOC announcement, Chris and Axel discuss the next moves of the central banks, who's intervention and collusion have driven markets more than any other factor over the past decade. Most people don't realize that monthly liquidity injections are currentlyat their highest ever since QE began.

Now that the Fed is talking seriously about tightening -- can it? Or will the markets revert to throwing a tantrum as the global liquidity spigots begin to reduce their flow?

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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When The Bubbles Burst...

How bad will it get? And how should you prepare?
Friday, December 1, 2017, 11:58 PM

Executive Summary

  • It's Time To Name The Guilty
  • The Gross Global Mis-Pricing Of Risk
  • The New Fed Looks Even Worse Than The Old
  • What You Should Do To Prepare

If you have not yet read Part 1: You're Just Not Prepared For What’s Coming, available free to all readers, please click here to read it first.

So I just want to raise my hand here and say that I am in favor of handing out serious punishments to the central bankers who negligently placed all but a very tiny few directly into harm’s way, knowingly and maliciously.  They knew they were harming pensions, savers, retirees, the young, the poor and the middle-classes.   They knew what they were doing was harming an entire generation of young people, fostering a deeply unfair and ultimately dangers wealth and income gap, and backstopping bank losses even (especially?) when those banks did stupid things that deserved losses. 

Yet they insisted and they persisted.  And here we are, with the third set of bubbles in 20 years and the largest wealth and income gaps in all of history.  I say the people responsible should be held accountable.

This Time Is Going To Be Different?

When these bubbles burst, and trust me they will, the aftermath is going to be especially ugly.  Like all bubbles, we’ll discover that a vast amount of lending took place towards ideas and projects and in support of spending habits that really should not have been undertaken.

Credit bubbles always end up making a pile of loans to really derelict ideas.  This time is no different, except the scale is so much larger.  There are so many bright red warning lights that it’s difficult to figure out which ones to convey.

Like the charts above, each one of these next charts could easily be an entire meditation that, if deeply understood, would reveal the whole story.  So settle in, take a deep breath and please consider the following.

First up, we have this deeply shocking chart for which the data has only gotten more shocking in recent months... » Read more

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Off The Cuff: The Central Banks Are Starting To Really Worry

About the Frankenmarkets they've created
Thursday, November 30, 2017, 11:29 PM

In this week's Off The Cuff podcast, Chris and Wolf Richter discusses:

  • Worried Central Banks
    • The risks of financial instability are mounting
  • The Cryptocurrency Conundrum
    • Can the central banks afford not to contain it?
  • Too Much Leverage
    • When credit tightens, the system will crash
  • Housing Harm
    • Many regional real estate markets are poised to burst

Wolf watches the minutes of the Fed and ECB closely, and concludes they are (finally!) becoming very concerned about the market imbalances that years of central bank liquidity and intervention have resulted in. They desperately want to cool things off, but have no idea how to do so without pricking the massive asset bubbles they have created. Whether they figure out a graceful way to do it or not (and he and Chris bet "not" is much more likely), he sees a fast-approaching sudden end to the era of ever-rising asset prices.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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Off The Cuff: So Then What?

If robust economic growth returns, is that a good thing?
Tuesday, November 28, 2017, 12:46 PM

In this week's Off The Cuff podcast, Chris discusses:

  • So Then What?
    • The cost of growth may be much higher than we truly want
  • The Exponential Model Can't Work Forever
    • Simple math, but wishful thinking ignores it
  • Data, Debt & Demographics
    • The really big trends all point to growing scarcity
  • Spend Less & Spend Local
    • Smart frugality is the path of the future

This week Chris explores: What will happen if those cheering for higher economic growth indeed get what they want? Will things really be better off?

Simply put: No.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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Off The Cuff: Increasing Signs The Long Bubble Cycle Is Ending

Long-standing trends are beginning to reverse
Monday, November 20, 2017, 2:01 PM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • End-Of-Cycle Signals
    • Long-standing trends are changing
  • Big Trouble In Saudi Arabia
    • Now a powderkeg with a short, lit fuse
  • Central Bank Culpability
    • It's scary how such powerful entities are so clueless
  • Bitcoin Today, Gold Tomorrow
    • Hot capital will seek trusted shelter when crisis arrives

In this podcast, John enumerates the growing number of market indicators he sees that suggest major trend changes are afoot in the economy. He believes the long-standing bull cycle, now at bubble-level extreme asset valuations, is set to reverse.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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Success Strategies For Retirement

How to afford retirement, enjoyably
Friday, November 17, 2017, 7:26 PM

Executive Summary

  • The Importance of Adding New Income Streams
  • Income-Producing Assets
  • Taking Advantage of Subsidies
  • Hedges, Cost-Controls & Other Strategies
  • The 14 Steps to Prosperity

If you have not yet read Part 1: The Great Retirement Con, available free to all readers, please click here to read it first.

In Part 1, we revealed the woefully insufficient level of retirement savings -- across IRAs, 401ks, and public pensions --- America faces as it's largest demographic cohort, the Baby Boomers, now reaches retirement age. And eating quickly away at the scant savings that exist is the soaring cost of big-ticket essentials such as rent, higher education and healthcare that retirees can't avoid paying.

So what can we do about it?

There are only a few strategies that can make a real difference:  own assets and income streams that keep up with real-world inflation, radically reduce the cost structure of big-ticket household expenses, qualify for subsidies (i.e. lower household income), and/or adopt a healthier view of what prosperity in retirement means.

Owning Income-Producing Enterprises and Assets

This chart says volumes about the difference between wealthy households and middle-class households: the middle-class households’ primary asset is the family home, while the wealthy households’ primary asset is business equity: ownership of an enterprise or shares in enterprises.

Developing a profitable enterprise is easier said than done (it helps to inherit a family business), and there is no guarantee a business that’s successful today will still be successful next year.

Nonetheless, it’s striking that the middle class is... » Read more

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The Oil Threat

Why a debilitating price spike is 2 or less years away
Friday, November 10, 2017, 6:57 PM

Executive Summary

  • China's imminent peak in oil production
  • The final key player in this story: Russia
  • How to prepare before oil becomes a LOT more expensive
  • What to prepare for? Higher prices (for everything real), lower prices (for everything paper), and more wars...

If you have not yet read Part 1: If The Saudi Arabia Situation Doesn't Worry You, You're Not Paying Attention available free to all readers, please click here to read it first.

China’s Impending Oil Peak

The motivations of China are completely obvious here.  China is eager to forge better relations with any country from which it can import oil and KSA is right at the top of that list.

A truly startling (to me) report from the China University of Petroleum put all of this in proper context and urgency came out earlier this year (2017) which announced that after conducting a wide-ranging study that China faces an imminent peak in oil output (from both conventional and unconventional sources) as early as 2018.

This is really big news.   The implications for global geopolitics, financial stability, and literally anything you consider personally important are huge.

China faces looming energy crisis, warns state-funded study

Oct 5, 2017

Nafeez Ahmed

A new scientific study led by the China University of Petroleum in Beijing, funded by the Chinese government, concludes that China is about to experience a peak in its total oil production as early as next year.

Without finding an alternative source of “new abundant energy resources”, the study warns, the 2018 peak in China’s combined conventional and unconventional oil will undermine continuing economic growth and “challenge the sustainable development of Chinese society.”

This also has major implications for the prospect of a 2018 oil squeeze — as China scales its domestic oil peak, rising demand will impact world oil markets in a way most forecasters aren’t anticipating, contributing to a potential supply squeeze. That could happen in 2018 proper, or in the early years that follow.

There are various scenarios that follow from here  — China could: shift to reducing its massive demand for energy, a tall order in itself given population growth projections and rising consumption; accelerate a renewable energy transition; or militarise the South China Sea for more deepwater oil and gas.

Right now, China appears to be incoherently pursuing all three strategies, with varying rates of success. But one thing is clear — China’s decisions on how it addresses its coming post-peak future will impact regional and global political and energy security for the foreseeable future.

(Source)

The author of the article, Nafeez Ahmed (who we’ve interviewed before and admire greatly - he's one of the really good ones out there), left out one other option on China’s scenario table, which was to forge stronger relationships with the world’s two key oil exporters – Saudi Arabia and Russia.   That scenario is now a reality and already well underway. 

Here’s the mind-blowing chart that the study produced.  It literally tells the... » Read more

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Off The Cuff: Regime Change!

The unfolding power play in Saudi Arabia is a very big deal
Thursday, November 9, 2017, 5:42 PM

In this week's Off The Cuff podcast, Chris discusses:

  • Regime Change
    • What going on in Saudi Arabia is a huge deal
  • We May Not Like What Comes Next
    • The Saudis are getting a lot more chummy with China & Russia
  • Rules For Rulers
    • Much of the Saudi shuffling make sense when viewed through that lens
  • Observations From Munich
    • Chris reflects on some cultural strengths that caught his eye

Chris has spent much of the past 48 hours analyzing the fast-changing situation on the ground in Saudi Arabia. Why? Because the axis of America's global might revolves in large part around its continued easy access to plentiful cheap oil from that kingdom. But recent developments suggest a shift may be underway -- one not in the US' favor. What will the implications be if this proves to be the case?  

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
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TreasuryDirect

A Primer On How To Use TreasuryDirect

A step-by-step walkthrough
Friday, November 3, 2017, 8:35 PM

Executive Summary

  • Create a TreasuryDirect account
  • Funding and transacting in your account
  • Laddering your transactions
  • Advice for your first transaction

If you have not yet read Part 1: Earn More On Your Cash Savings (With Less Risk) available free to all readers, please click here to read it first.

If you have cash savings in excess of $10,000 stored at a bank, it makes good sense in today's low-interest rate environment to consider opening a TreasuryDirect account in order to obtain a much higher return for equivalent better risk, as detailed in Part 1.

I, myself, have done this with my own personal cash savings. And I currently remain actively invested in T-Bills through TreasuryDirect. So I have first-hand experience from which to judge the program.

Here in Part 2, I'll walk you through the straightforward steps for creating a TreasuryDirect account (which is free), funding it, and then making transactions within it. 

Before I do though, let me make a few things absolutely clear. This is NOT personal financial advice. The investment choices I make are based on my own unique situation, financial goals and risk tolerance. And I may change these choices at any moment given new market developments. What's appropriate for me may not be for you, so DO NOT blindly duplicate what I share of my own personal investing plans in my writings on this website.

As always, we recommend working with a professional financial adviser to build an investment plan customized to your own needs and objectives. (If you do not have a financial advisor or do not feel comfortable with your current advisor's expertise in the market risks we discuss here at PeakProsperity.com, consider scheduling a free consultation with our endorsed advisor)

Suffice it to say, any investment ideas sparked by this report should be reviewed with your financial advisor before taking any action. Am I being excessively repetitive here in order to drive this point home? Good.

With that clarification, here's what you need to get started... » Read more