Zero Hedge: In a recent blog post from DB’s Francis Yared, the credit strategist looks at one of the lesser discussed drivers of inflation and points out that supply shocks to oil prices have historically been relevant for inflation expectations.
As Yared writes, “supply shock to oil prices have had a significant impact on inflation expectations on three occasions over the past half century: in the mid 70s, the mid 80s and the mid 10s.” However, unlike the infamous price explosions of the 70s and 80s, in the latest episode the “shale oil revolution” resulted in a significant positive supply shock to oil markets which led OPEC in 2014 to defend its market share rather than oil prices.
The downward pressure on oil prices, Yared writes, resulted in a shift to a lower inflation regime, which was reflected in both consumer and market inflation expectations (University of Michigan 5-10y and 5y5y breakevens) as well as monetary policy expectations and the term premium.
Well not anymore, because ESG is unwinding the shale oil revolution. As recent events at Exxon and Shell have shown, the pressure on oil companies to reduce oil and gas exploration and adapt their business models has increased significantly over the past few months. This is reflected in crude rig counts that have lagged the recovery in oil prices and stand at 1/3rd of the 2014 peak. Read More …
Opinion: The shale oil revolution that combined hydraulic fracking and horizontal drilling enabling the United States to become an energy independent exporter, free of Middle East pressure, is being summarily dismissed by Joe Biden. On his first day in office, Biden cancelled the Keystone Pipeline to the detriment of Canada and the US, but to the benefit of Russia.
In our post on April 5, we added the ESG to a growing list of authoritarian controls:
- Social Credit Score (SSC)
- Environment Social Governance Score (ESG)
- Global tax based on ESG score
- Shut down oil exploration
- Government run health care
- Cashless society/Central bank digital currency
- Vaccine passports
- Universal Basic Income
When we factor in programmable central bank digital currencies and a dependent middle class on the government dole, the SCS and ESG will become like a giant boot on a completely dependent society.
“So they worshiped the dragon who gave authority to the beast; and they worshiped the beast, saying, “Who is like the beast? Who is able to make war with him?” Revelation 13:4
If you missed it, Glenn Beck exposed the ESG in this video: