The essential deplorables.

If you’re working outside your home, chances are you’re essential.  It varies state to state, but much of blue collar America is essential, from farmers to pickers to food processors to truckers, and on and on.

Hollywood, teachers, lawyers and environmentalists are not essential, along with a long list of occupations favored by self-styled elites.  We can get along without them, and that’s what we will find ways to do.

The wuvirus could cause profound and lasting socioeconomic change.  Old elites may be overthrown, and some sort of new social order will emerge.

In a way, it’s an exciting time to see unfold before you, in ways we can’t imagine.

Is Trump playing the Russians?

(In today’s American Thinker)

With President Trump, we’ve learned not to take him literally.  He says things for his own reasons, and his words are an uncertain guide to his actions.  This is one aspect of his art of the deal: keep your opponent guessing.

Does he really want the Saudis and the Russians to cut a deal on oil, and drive the price back up?  Or would he prefer to keep the price war going, severely punishing the Russians?  He can easily protect the American oil industry with a tariff, which he discussed with the oil executives on Friday, and which his most trusted oil adviser, Harold Hamm, is pushing.

In the big geopolitical picture, American energy dominance is a powerful tool for advancing American interests.  We have a dominant economy, a dominant culture, and a dominant military.  Add energy dominance, and it’s America First across the board.  A long price war outside our borders will crush marginal producers around the world, and it would hurt the Russians severely.  When the dust settles, American shale can continue its ascendance to domination in world markets.

The OPEC meeting on Monday, which caused the oil price to jump, has been postponed.  The Russians said some mean things about the Saudis, and that was all it took. Look for the Saudis to slow walk this process, while they claim to want a deal. They are in the catbird’s seat, and they have been inflicting pain on other producers for only a month.  They’re just getting started.  If they back down now, they lose face.

Muhammad bin Salman has been in power only since 2017, but in that short time he has seized unchallenged power within the Saudi royal family.  He has arrested hundreds of them, and made some very powerful enemies.  Those excluded from his cirlce, and from power, thirst for vengenace.  If he shows weakness in his handling of this price war, it can increase his vulnerability.  He can’t afford to let that happen.  Losers in Saudi royal intrigues can pay with their life.

He has every incentive to continue this war.  Especially if President Trump is winking at him in encouragement.

 

 

A game of cutthroat

The Clint Eastwood movie “The Good, the Bad and the Ugly” ended in a three way shoot out, a game of cutthroat to the death.  Trump, Muhammad bin Salman, and Putin are playing their own version right now, over oil.  They are the three big dogs in the world oil industry, each fiercely protective of their country’s interest.  Each determined to be the winner, and the others the losers.

It’s a complicated game.  Deception is the key.  Make both of your opponents believe you are their friend, while trying to take advantage of both of them.  There is no room for friendship in this game, only stark national self interest.

Putin is playing the weakest hand, and an unstated reality is that the Saudis and the Americans have worked together strategically for 70 years.  They would prefer to maintain that relationship.

So they have to figure out a way to screw the Russians.  The easy way is for Trump to put a tariff on all oil, except from Alberta.  That leaves the Saudis and the Russians to fight it out between them.

Putin loses that war, and our number two geopolitical foe has his head handed to him.  Marginal oil producers around the world are driven out of business, and our shale industry, healthy and intact, proceeds to provide the USA with energy dominance.

All the President needs to do is impose the tariff.

The investment opportunity of a lifetime

I encourage my loyal readers to read the following, published earlier today at Oilprice.com:

The greatest trade in decades,

The return of the super contango.

I’ve been closely following the oil industry for four decades, and Nordic American Tanker (NAT) and DHT Holdings (DHT) are the best bets I’ve ever seen.  Don’t take my word for it.  Check them out.

I first got into the market when I was 14.  I had about $175, and I didn’t want to settle for bank interest.  My Aunt Mary took me to meet a rich old man, Mr. Gelleher, who was the father of her deceased boy friend.  He was a retired executive from Libby.  He said one word.

Oil.