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• 2014 Oil Price Collapse is Economic Warfare

posted Jan 16, 2015, 5:26 AM by Sven Schiepers   [ updated Jan 27, 2015, 12:10 PM ]

Wall Street Journal reporter David Bird discovered oil market vulnerability in 2013 - Missing ever since

The oil price collapse is pure economic warfare

When the financial crisis hit the western banking system in 2008, the Federal Reserve started their controversial monetary stimulus. In addition to a near-zero percent interest on overnight borrowing, the Fed has since pumped almost $4000 billion into the economy. That’s over 23% of the country’s total productive output in 2013.

A lot of industries were severely crippled during the first stages of the crisis. One of the few safe and profitable investments was in the the US shale industry. Reportedly, production could be competitive from $25-30 a barrel after it’s initial fase. The price ranged from roughly $50 in late 2008 to $110 before the current drop. Suspectedly, astronomical amounts of free money flowed directly into this environmentally unsustainable, high-yield business.

As a result, the US is currently the biggest oil producer in the world. Their net imports declined from 4.4 billion barrels in 2008 to 2.3 billion barrels in 2013. For the past six months, we’ve seen nothing but positive signals implying a recovery of the US economy. A recovery could prompt the Federal Reserve to temper their stimulative monetary policy. This would mean higher interest rates on dollars, which strengthens demand for the international ‘safe-haven’.

A strong dollar means that commodities traded in dollars become more expensive in other currencies. More expensive commodities slow down productive activity in these economies. Less productive activity around the world means less oil is needed and so over-supply is lurking. No one really expects an over-supply though, because most OPEC cartel members need prices well above $70 a barrel to stay solvent in the middle-longterm. Historically, they would cut production to set their desired price.

OPEC didn’t and no one seemed to have expected the decision. Some will tell you it is a political plot between the US and SA governments. We can’t really know and it doesn’t matter. The reasons OPEC has for not cutting production are legitimate. If they’d cut production now, shale would stay the extremely lucrative investment it has been in the past years. Prices would stabilize, but shale market-share would continue to grow at an even faster pace.

The effects I described have been forecast in 2013. David Bird was an oil and commodities market reporter for the Wall Street Journal. In one of his last articles he wrote the following.

"Crude-oil futures fell after the minutes from the Federal Reserve’s latest policy meeting heightened concerns that less economic stimulus could hit demand for the fuel…

Traders are worried that the end of the $85 billion-a-month bond-buying

program will cause dollar-based crude prices to rise in local-currency terms, choking off economic growth [and recovery] in other markets that has fueled a rise in global oil consumption in recent years"

Bird disappeared shortly after. Although we can’t know why or how he disappeared, he surely hit on something big. He saw a connection between the monetary policy of the central bank, shale industry, dollar rates and eventually oil futures. As soon as the Fed even talked about scaling back, oil futures started falling. He discovered that the Federal Reserve had the potential to heavily influence the global oil markets, only by announcing legitimate domestic monetary policy changes. It’s is exactly what they did in October 2014 after months of perverted positive indicators flowed into the financial news. The market hesitantly followed Bird's prediction.

A surprise factor is crucial in dealing such an economic blow to other economies. Would Bird have come forward with his analysis, markets and governments could have reacted much sooner. The shock wouldn’t have hit so hard. Lead investigator Chief of the Longhill Township Police Department Michael Mazzeo stated that they didn’t think his work could have had anything to do with his disappearance. I wonder whether the local sheriff is even capable of seeing geopolitical, economic warfare as a motive for abduction or murder.


Figures and numbers are rough google results, if you don't like them, correct them in comments please.

David Bird Wall Street Journal article seems unretrievable through google searches. Alternative US media are quoting it. I’m sure someone can find the original if it’s out there.

Michael Mazzeo and disappearance of David Bird