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Like Chickens with Their Heads Cut Off

The cock-istocracy says, 'Don't panic!'

Kakistocrat (aka Sub-Zero) puppet Biden continues to act erratically, like a chicken with its head cut off.

The latest is a reversal of a recent policy to run down the Strategic Petroleum Reserve (SPR).

The Department of Energy announced Wednesday it will solicit bids to buy 60 million barrels of oil to help start to replenish the record release from the Strategic Petroleum Reserve (SPR) that President Biden approved earlier this spring to address high gas prices. The bidding process will begin in the fall, with a goal of replenishing about one-third of the 180 million barrels released in response to the Russian invasion of Ukraine.

To our way of thinking, this will be classic sell-low, buy-high. It’s hard to define this kind of behavior other than tawdry corruption to benefit the cronies of the “10% for the Big Guy” regime. You can see in this chart the minor and fleeting benefit of the SPR release.

We are also seeing the ramifications of shipping natural gas (LNG) off to Europe. This is unfolding quickly and as we predicted.

The prospect of higher cooling demand in Texas has sent natural gas futures soaring on supply concerns. June contracts jumped above $8/MMBtu on Wednesday and, as of Thursday morning, are around $8.50/MMBtu, a level not seen since late 2008.

Bespoke Weather Services said, “If this kind of heat sticks around, and that is a risk in the South, where we have been leaning hotter with our summer ideas … We easily will go over $10 in prompt month over the next several weeks.”

If summer is hot and gas is exported, then pressure on storage will build. You can see from this chart that NG storage is below average. The angle of the rebuild is also wavering a bit and will need to pick up.

The Federal Reserve has and will continue to be slow as molasses in countering serious inflation. The portfolio runoff doesn’t start until June 1 and is only $47.5 billion a month for the first three months.

Of course, they can’t print energy and food. Powell freely admitted that the only thing the Fed has some influence over is demand.

With the government largesse no longer coming in and inflation eating into buying power, the consumer has resorted to desperate and record-high borrowing to maintain living standards.

May 6 update:

Despite consumers showing up with credit cards in hand, 34 percent of small retail businesses couldn’t make rent in April, Retail Dive reports, citing survey data from Alignable. Retailers pointed to inflation, gas prices, supply chain issues, labor shortages and reduced revenues as compounding their financial woes.

The bond market broke again on Thursday, the day after the FOMC meeting. There is only one factor that contributed to this crash in bonds: extreme overvaluation. In Europe, junk credit has been massacred even worse and the ECB has done nothing to move to even ending QE.

Even the 3% offered on Treasuries is still overvalued, especially relative to inflation rates. It’s hard to defend the fiduciary irresponsibility of the Sub-Zeros who piled into bonds over the last two years. But marked to market, these losses suggests more than a few leveraged players are broken. I fully anticipate that we are days or hours away from a Long Term Capital Management type “emergency” as the casino wild men are carried out on stretchers.

The reality is that the economy is weakening rapidly as well. This shows up in derivative indicators, such as trucking. The van rates per mile are not enough to cover fuel and truck overhead costs. This will empty out the highways soon enough. As we have suggested for those who are following along, the high fuel cost is self-inflicted by Sub-Zeros as players in the sistema exported distillates out of the U.S.


Read “Setting up an Apocalyptic Summer”

5 Comments on Like Chickens with Their Heads Cut Off

  1. Turkey, a pretty big military power, had 70% inflation for April. Their government plans to lower interest rates to fight inflation according to RT. That strategy is just the opposite of the Feds plan of raising rates to stymie price hikes. How does Turkey’s plan even make sense? They need an enemy/distraction quick to rally the pajama people in this regional power broker. Russians, Kurds, Armenians, Syrians? I suppose any bogeyman will suffice.

  2. Russia’s patriotic rallying song- Donbass is Behind Us
    The setting is the WWII battle memorial on a hill in Donbass.

    Donbas is with us
    In the deep darkness, a beast awoke,
    And to the God, the price was named,
    Everyone bowed down, even brothers in Christ,
    Everyone bowed down, but not my country.

    The year was graceful and fruitful,
    And with blood and death it was painted,
    The lead filled clouds overtook the skies,
    Everything bowed down, but not my country.

    Half of the sky is aflame,
    Half of the sky in smog,
    Donbas is with us,
    And so is God!

    Half of the sky is aflame,
    Half of the sky in smog,
    Russia is with us,
    And so is God!

    Here the memory never gave up on our fathers,
    We never gave up on our forefathers lands,
    Not for any price will you find the words,
    To give a life for fatherland is nothing.

    And once again the Russian power is at hand,
    Both life and death, for our country are red,
    It stands and holds the heavenly clouds,
    My undefeated county.

    Half of the sky is aflame,
    Half of the sky in smog,
    Donbas is with us,
    And so is God!

    Half of the sky is aflame,
    Half of the sky in smog,
    Russia is with us,
    And so is God!

    May be it that you die on the cross,
    But on our knees we shall not be thrown,
    On the bloody battlefield, one is for all,
    Holds and keeps the heavenly clouds Donbas.

    Half of the sky is aflame,
    Half of the sky in smog,
    Donbas is with us,
    And so is God!

    Half of the sky is aflame,
    Half of the sky in smog,
    Moscow is with us,
    And so is God!
    https://lyricstranslate.com/en/donbass-za-nami-donbas-us.html

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