Tangibles, Yet Again.

A little piece of news today. 

At a time of weak economic growth and increased market volatility, analysts are getting more bullish on gold. According to Bank of America, the precious metal is headed 78 percent higher, to hit $3,000 per ounce in 18 months.“As economic output contracts sharply, fiscal outlays surge, and central bank balance sheets double, fiat currencies could come under pressure. And investors will aim for gold,” the bank’s analysts said, adding that the US Federal Reserve has provided enough momentum to propel investment demand and prices higher. They have warned that the Federal Reserve’s balance sheet as a percentage of GDP could rise 20 percent to 40 percent this year. They’ve also pointed out that the Fed “Can’t print gold.”

You gotta love this fancy BS "financial" lingo: "momentum", "economic output", "investment demand". What a load of a contrived BS. To put it in simpler words--paper, from dollars to all kinds of "paper gold" (certificates, not physical gold) and stocks are worthless because they are.... well, papers which merely reflect the mood of moneyed class, which, while being moneyed, is not very bright, to put it mildly, and believes in all kinds of fairy tales about "financial markets". But once crapola begins to hit the fan in earnest one needs to "hide" whatever "investment"--yeah, let's call greed and speculation that--one has accumulated in something which will not be burned, literally and figuratively, in the furnace of financial voodoo going off the ritual script completely. 

Now, The Donald in a futile attempts to keep his "promise" to resurrect a corpse of a deceased US shale oil, and reading this fresh news:

(Bloomberg) -- An historic crash in crude prices is driving U.S. shale into full-on retreat with operators halting new drilling and shutting in old wells, moves that could cut output by 20% for the world’s biggest producer of oil and leave thousands of workers unemployed. For shale companies, the price of West Texas Intermediate crude went from hunker-down-and-ride-it-out mode to crisis mode in just a few days, with many now unsure whether there will even be a market for their oil. Some 1.75 million barrels a day is at immediate risk of shutting down while the number of new wells being brought online is forecast to plunge almost 90% by the end of the year, according to IHS Markit Ltd.

Decided to employ his old (and only) trick in an attempt to "raise the price" and ordered:

WASHINGTON (AP) — President Donald Trump said Wednesday that he has ordered the Navy to “shoot down and destroy” any Iranian gunboats that harass U.S. ships, a directive that comes a week after the Navy reported a group of Iranian boats made “dangerous and harassing approaches” to American vessels in the Persian Gulf. Trump did not cite a specific event in his tweet or provide details. The White House had no immediate comment. The U.S. Navy’s Bahrain-based 5th Fleet referred questions about the tweet to the Pentagon, and the Pentagon referred questions to the White House.

Boy, you have to admire Donald's insouciance, that he has put US Navy professionals into stupor because "shooting down" gunboats requires a rather vivid imagination and a strict diet of fantasy novels for a long time in order to exist in the world of flying ships, magical spells and alternative realities. This is not to mention the fact that there are some practices in the maritime law, such as following other ships in neutral waters (I know, been there, done that), which are by no means forbidden and, in fact, are normal practice, like this, with Royal Navy's frigate shadowing Russian navy's corvettes: 

Of course, definition of "harassment" is a tricky one, but what do ya know, one has to do what one has to do trying to raise the price by any means. There is, however, a larger picture begins to emerge since the question of "who is winning" in oil war is not even on the agenda anymore, albeit Canadian oil analysts arrive to this conclusion:

North American producers are getting crushed as a flood of oil is expected to keep prices depressed for longer.RBC Capital Markets expects U.S. shale production to fall 1.5 million barrels per day. The bank says that the producers it is tracking have slashed 2020 investments by more than US$70 billion (about 30 per cent of total) since the beginning of March.“Meanwhile, temporary production shut-ins are already underway amid refinery run cuts due to collapsing refined product demand and ballooning storage levels,” RBC said. “We expect U.S. refinery utilization rates to fall from about 70 per cent currently to 60 per cent — and potentially further — as the second-quarter unfold.” 

No, the issue is broader, especially when one considers those funny statements from Saudis about Russia "being a part of the family" and that "families always overcome quarrels", just google that, the issue is US financial "empire" is at stake. Indeed, when one has these kind of forecasts:

All told, North American production could contract by 2.64 million bpd this year, with OPEC shut-ins at around 575,000 bpd, according to data gleaned from RBC and Rystad. “As storage fills up, countries are being forced to shut-in production on a large scale to counteract a theoretical oversupply of 21 million bpd in 2Q20,” said Rystad Energy senior oil market analyst Teodora Cowie. 

And increasing trade in local currencies between major players (as an example, find videos of Putin's visit to Kaliningrad and his stern demand to transfer all operations by ports into Rubles), plus parallel introduction of alternatives to SWIFT, all of it indicates that the world cannot run anymore on fairy tales but needs tangibles to find its new footing and for that, as they say, Petrodollar Delendum Est. I begin to believe that the plan for that was in place from the get go and was merely adjusted for the severity.