Originally published at: https://peakprosperity.com/daily-digest/global-oil-peaked-in-2018-debt-races-higher/
Energy
World crude oil extraction has seen a decline since its peak at 84.6 million barrels per day in late 2018, with current production averaging 81.7 mb/d over the last 24 months. This reduction is attributed to fluctuating oil prices and decreased profitability, compounded by the lingering effects of the COVID-19 pandemic. Despite a growing global population, oil prices have not consistently risen, currently standing at $69 per barrel. Concerns about a potential US recession further impact these prices. OPEC’s production has also decreased from its peak of 32.9 mb/d in November 2016 to an average of 29.2 mb/d recently. US oil production has experienced peaks and troughs, with recent increases due to the completion of previously drilled wells, though future growth appears limited. Central banks’ manipulation of debt levels and interest rates to stabilize oil prices faces challenges, with potential collapses in property investment in China, Japan’s carry trade, and the US dollar’s role as the reserve currency posing risks. Disruptions in demand from major users like China could significantly impact prices, highlighting the complexity of the global oil market.
Economy
The U.S. federal deficit has reached a historic high of $35.362 trillion, with projections indicating continued high deficits unless significant changes are made. Lyn Alden, an independent investment and macroeconomic analyst, notes that the U.S. is entering a phase of fiscal dominance, where fiscal deficits heavily influence the economy and financial markets. Factors contributing to persistent deficits include an aging population, inefficient healthcare spending, costly foreign military engagements, rising debt interest, and political polarization. Social Security is expected to deplete its funds by 2035, and healthcare costs are increasing. Political polarization hinders meaningful fiscal reforms, complicating efforts to reduce the deficit. Alden suggests that the U.S. faces two choices: keep interest rates low and debase currency holders or raise rates and risk a fiscal spiral. For investors, she advises a cautious approach to U.S. stock indices, favoring reasonably-priced cyclical and mid-sized stocks, with potential for international stocks to outperform during the upcoming Fed interest rate cutting cycle. Gold and Bitcoin are seen as strong investments, though their volatility requires careful portfolio management.
A speaker at the Mises Institute discussed the importance of understanding economic principles in the context of the COVID-19 crisis, reflecting on their journey from molecular science to exploring the economic and political implications of the pandemic. They discussed the impact of psychological warfare and fifth-generation warfare technologies on individual autonomy and free will, foundational to libertarian thought. The speaker highlighted the role of surveillance capitalism, driven by companies like Amazon, Google, and Facebook, in violating principles of voluntary economic transactions. They expressed concern about the normalization of these methods and the erosion of individual autonomy. The speaker concluded by discussing the need for decentralized lifestyles and parallel systems to resist the encroachment of surveillance capitalism and psychological warfare, encouraging critical thinking and responsibility in shaping the future.
Geopolitics
Russia has expressed readiness to collaborate with China in response to Western aggression, following US accusations that China is supporting Russia’s military efforts. US deputy secretary of state Kurt Campbell claimed China is providing significant military components to Russia. In response, Chinese state media announced joint naval patrols between China and Russia in the Pacific. Russia’s foreign ministry warned that Moscow and Beijing could unite their capabilities against US aggression, though their cooperation is described as defensive. The context includes concerns over the potential deployment of US Typhon mid-range missiles to Japan, with China condemning this move. The increasing coordination between China and Russia is seen as a reaction to ongoing US sanctions and punitive measures against both nations.
The United Nations is set to approve three new non-binding agreements at the Summit of the Future in New York on September 22-23, 2024. These agreements include the Pact for the Future, the Declaration on Future Generations, and the Global Digital Compact. The Summit aims to reaffirm commitments to the Sustainable Development Goals (SDGs) and address global health, economic development, and human rights issues. However, the UN’s credibility has been questioned due to its handling of the COVID-19 pandemic. The agreements are criticized for their vague and contradictory statements, potential for censorship, and expansion of bureaucracy at the expense of individual freedoms and national sovereignty.
Sources
World Crude Oil Production: Past Peak and Facing a Rocky Future
World crude oil extraction reached an all-time high of 84.6 million barrels per day in late 2018, and production hasn’t been able to regain that level since then.
Source | Submitted by roosterrancher
Nassim Taleb: Gold is the Real De-Dollarization Play Amidst Record U.S. Federal Deficit
Gold is the real de-dollarization play – Nassim Taleb
Source | Submitted by rhollenb
Dr. Robert Malone’s Eye-Opening Address: The Intersection of Economics, Libertarianism, and Psychological Warfare
“Now I find that economics is what’s driving politics. Now I find that it’s the markets, it’s Mr. Market that is defining the New World Order.”
Source | Submitted by rhollenb
Russia and China Threaten ‘Double Counteraction’ Against US Aggression
“I would like to remind you that Moscow and Beijing will respond to ‘double containment’ by the United States with ‘double counteraction’,” ministry spokeswoman Maria Zakharova said.
Source | Submitted by AaronMcKeon
UN Summit to Approve Three New Pacts Amidst Global Skepticism
“Global crises call for global governance. But can we trust the scriptwriter who is the only contestant for that governor’s seat?”
Source | Submitted by AaronMcKeon