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Keeping Track of the Chess Game and the Sub-Zeros

Sub-Zeros Hard at Work

 “Commodities are real resources and resource inequality cannot be addressed by QE… you can print money, but not oil to heat or wheat to eat.” — Zoltan Pozsar

This post follows on certain data-points and dot connecting- aka the chess game – from our post: Following up on Reality: The Geopolitical Chess Game

Sub-Zero Joe Biden is desperately gambling on a 2022 version of the Battle of the Bulge with his proposed SPR (Strategic Petroleum Reserve – aka Strategic Midterm Reserve) release of 180 million barrels of oil out of a reserve of 550 million. The plan is to release a million barrels a day, as necessary. TRAFIGURA: SPR can only deliver 400K-500K BPD of oil. In typical Sub-Zero fashion (kakistocracy) it also creates potential logistical bottlenecks:

Goldman Sachs: “Potential logistical bottlenecks to such an unprecedentedly large and long US SPR discharge could reduce its flow rate, with potential congestion on the Gulf Coast in getting to refiners or export terminals.”

Negative selection: is when a controller selects and promotes incompetence and malevolence in order to prevent their position from being challenged. In its extreme form, negative selection is known to occur in regimes whereby a controller may “purge” anyone who shows initiative or intelligence.

SENIOR U.S. ADMINISTRATION OFFICIAL SAYS IT WILL TAKE MONTHS NOT DAYS FOR ADDITIONAL U.S. OIL PRODUCTION TO COME ON LINE

— zerohedge (@zerohedge) March 31, 2022

This would run down the end of the rope, and take the inventory down to 370 million – a mere 22 days and the lowest in half a century.

As US empties its SPR, China is filling up its own with oil priced at a $35 discount from Russia.

SPR before proposed release- headed off the chart:

This follows after Joe’s posse went to various previously sanctioned countries like Venezuela begging for oil.

Houthi rebel ceasefire with Saudi Aramco over. Expect fireworks.

Global crude oil inventories:

Natural gas inventories are running down as US prepares to ship more LNG to Europe. The amount of gas in storage in the lower 48 states is 17% below the five-year average for this time of year despite production that has eclipsed pre-pandemic highs, according to the Energy Information Administration.

Consolidated Edison Inc. , which provides electricity around New York City, has already passed on big price increases to customers this year and told them this month to brace for higher bills yet. “You pay what we’ve paid,” the utility said in an email to customers.

Read: WSJ- The LNG Export Boom Is Draining U.S. Natural-Gas Supplies and Lifting Prices

Financial Times: Germany prepares to ration gas due to rouble payment stand-off with Russia.

GERMAN ECONOMY MINISTER HABECK: GERMAN GAS SUPPLIES AT AROUND 25% CAPACITY.

Recession or worse coming in hot if this happens –

“If supplies fall short, and less draconian attempts to lower consumption do not work, the government would cut off certain parts of German industry from the grid and give preferential treatment to households.” https://t.co/F71m3Ob8M1

— Tracy (𝕮𝖍𝖎) (@chigrl) March 30, 2022

On top of it, ammonia and urea production in Europe is stopped due to gas price.

And China have banned phosphate exports as well last autumn. Roughly 30-40% of all fertilizer exports is out this year.

— Jonathan Schramm / Cyclical Value Investing (@Cyclical_invest) March 30, 2022

Obviously products like steel rebar requires steady supplies of gas.

Russia makes arrangements to sell this gas elsewhere.

Ruble fully recovered its Ukraine incursion swoon. Two weeks ago the Sub-Zeros were predicting Russian default. Instead it actually repurchased several bonds. Dump and pump.

Logistics managers are warning clients the two-stage lockdown in Shanghai could be worse than the initial COVID lockdowns. Shanghai’s 2-stage COVID lockdown may make getting containers ‘almost impossible’ .

 

5 Comments on Keeping Track of the Chess Game and the Sub-Zeros

  1. “Negative selection: is when a controller selects and promotes incompetence and malevolence in order to prevent their position from being challenged. In its extreme form, negative selection is known to occur in regimes whereby a controller may “purge” anyone who shows initiative or intelligence.“

    No idea this was an actual thing until just recently but I got to watch it happen for 20 years as a government employee. It’s hard to make any positive changes from within government when people are actively trying to get rid of you. May God help us all.

    • Nicks87 – You most probably speak Russian. I couldn’t find any place to click on that would translate to English, so could not understand any of it.

      • I don’t speak or read it either. I was somewhat disturbed by the map in the background. I followed a twitter link and boy oh boy what I found. I didn’t know there was a literal Russian mirror version of youtube full of the same pseudo-culture, (synthetic culture?) nonsense just like American youtube. My first thought was, is that how they justified the Ukraine invasion to the Russian people? It could be a joke too like Russian SNL or something.

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