Impending Global Recession, buckle up yee-haw!

[Hardartery]

[ For instance, the US has grenaded the Venezuelan economy because they have some of the most sour crude on Earth and the US is (or maybe just was now) the only country on Earth that could refine their oil meaning they can't sell to anyone but the US. Refiners like sweet crude more because it's not as many steps to refine meaning more profit so sour crude isn't as sought after. When supply gets tight though, sour crude becomes more profitable because of the margins.

So, this is not true. There are several countries on Earth that are not the US that are current purchasers of Venezuelan oil, in fact at least one of them relies on Venezuela for most of it's petroleum for political reasons. The reason the Venezuela is sanctioned and in rough shape has nothing to do with their oil reserves, and they in fact turned down the opportunity to negotiate and agreement with the US to resume exporting to them this past year. This is a problem of political alignment, Venezuela is aligned with Cuba, Nicaragua and Russia - to a lesser extent Iran as well. You will note the stark differences in not only economy but ideology between these two sides. And they all kind of hate China but work with China out of necessity.
Venezuela's main problem is that they do not maintain or improve their infrastructure for petroleum extraction and thus their per barrel costs are on par with processing the oil sands in Canada, which is their own fault. They also have virtually no manufacturing within the country outside of the petroleum industry, they chose to essentially drive that out or eliminate it in various ways during the rule of Hugo Chavez, choosing instead to simply import everything and pay for it with oil proceeds. The drop in crude prices a few years ago to below $50 a barrell precipitated their downfall, the break even for them is just above $50 a barrell so they could no longer make a profit with which to import and subsidize. They are extremely short sighted, the opposite of the Saudis in this regard.

[SnakePlissken]

[ For instance, the US has grenaded the Venezuelan economy because they have some of the most sour crude on Earth and the US is (or maybe just was now) the only country on Earth that could refine their oil meaning they can't sell to anyone but the US. Refiners like sweet crude more because it's not as many steps to refine meaning more profit so sour crude isn't as sought after. When supply gets tight though, sour crude becomes more profitable because of the margins.

So, this is not true. There are several countries on Earth that are not the US that are current purchasers of Venezuelan oil, in fact at least one of them relies on Venezuela for most of it's petroleum for political reasons. The reason the Venezuela is sanctioned and in rough shape has nothing to do with their oil reserves, and they in fact turned down the opportunity to negotiate and agreement with the US to resume exporting to them this past year. This is a problem of political alignment, Venezuela is aligned with Cuba, Nicaragua and Russia - to a lesser extent Iran as well. You will note the stark differences in not only economy but ideology between these two sides. And they all kind of hate China but work with China out of necessity.
Venezuela's main problem is that they do not maintain or improve their infrastructure for petroleum extraction and thus their per barrel costs are on par with processing the oil sands in Canada, which is their own fault. They also have virtually no manufacturing within the country outside of the petroleum industry, they chose to essentially drive that out or eliminate it in various ways during the rule of Hugo Chavez, choosing instead to simply import everything and pay for it with oil proceeds. The drop in crude prices a few years ago to below $50 a barrell precipitated their downfall, the break even for them is just above $50 a barrell so they could no longer make a profit with which to import and subsidize. They are extremely short sighted, the opposite of the Saudis in this regard.

Few things, I didn't realize Iran was so heavy in the oil trade with Venesuela now or that Cuba was ever such a large proportion. I always thought the US was 80%+ of their oil exports until the last few decades so I'll take that. They were for a long time very reliant on the US buying a large portion of their output and a lot of the refineries in South Louisiana used to buy their crude, and that has almost all stopped now. Their internal refining was never enough to process what they had, but they also like you said have terrible infrastructure to even get to it. The fact they have such a huge reserve of oil is kinda misleading because of how much more it costs to extract it.

[Hardartery]

[ For instance, the US has grenaded the Venezuelan economy because they have some of the most sour crude on Earth and the US is (or maybe just was now) the only country on Earth that could refine their oil meaning they can't sell to anyone but the US. Refiners like sweet crude more because it's not as many steps to refine meaning more profit so sour crude isn't as sought after. When supply gets tight though, sour crude becomes more profitable because of the margins.

So, this is not true. There are several countries on Earth that are not the US that are current purchasers of Venezuelan oil, in fact at least one of them relies on Venezuela for most of it's petroleum for political reasons. The reason the Venezuela is sanctioned and in rough shape has nothing to do with their oil reserves, and they in fact turned down the opportunity to negotiate and agreement with the US to resume exporting to them this past year. This is a problem of political alignment, Venezuela is aligned with Cuba, Nicaragua and Russia - to a lesser extent Iran as well. You will note the stark differences in not only economy but ideology between these two sides. And they all kind of hate China but work with China out of necessity.
Venezuela's main problem is that they do not maintain or improve their infrastructure for petroleum extraction and thus their per barrel costs are on par with processing the oil sands in Canada, which is their own fault. They also have virtually no manufacturing within the country outside of the petroleum industry, they chose to essentially drive that out or eliminate it in various ways during the rule of Hugo Chavez, choosing instead to simply import everything and pay for it with oil proceeds. The drop in crude prices a few years ago to below $50 a barrell precipitated their downfall, the break even for them is just above $50 a barrell so they could no longer make a profit with which to import and subsidize. They are extremely short sighted, the opposite of the Saudis in this regard.

Few things, I didn't realize Iran was so heavy in the oil trade with Venesuela now or that Cuba was ever such a large proportion. I always thought the US was 80%+ of their oil exports until the last few decades so I'll take that. They were for a long time very reliant on the US buying a large portion of their output and a lot of the refineries in South Louisiana used to buy their crude, and that has almost all stopped now. Their internal refining was never enough to process what they had, but they also like you said have terrible infrastructure to even get to it. The fact they have such a huge reserve of oil is kinda misleading because of how much more it costs to extract it.

They are somewhat hidden in what they get up to, but I know some people and have been a few places I can't currently discuss openly on the internet. Mentioning certain countries and places draws a lot of intention from local governments and I kinda need to avoid that. There are several Latin American countries that trade with Venezuela, among others. Certainly, it was a hit to their economy when the US cut trade, but how much is a State secret and no one will ever admit anything. It's like realistic war stats from Russia, it ain't gonna happen. It's very guarded info.
That's the reason you still can't buy antibiotics or toilet paper in Venezuela and the inflation is retarded.

[aurelius]

"And when he saw the plight of his people, lo, the dictator was struck with overwhelming guilt. And didst repent of his evil ways, and relinquished power back to the citizens. And yea, they all lived happily ever after, and there was great rejoicing, and they did feast on lambs, and the sloth, carp, and orangutan."

[GlasgowJock]

Bank of England raised interest rates a further 0.75% to 3% today in an effort to 'maintain the value of money' according to the BoE Governor. Seems to have forgotten that the last time inflation was in double figures in the UK it remained so for 3 years. He's desperately hoping gas prices will fall *soon* (lol) though it's inevitable interest rates will climb higher and it'll be default city here.

Obviously pissing in the wind as inflation is global, European land war, the Saudis being cheeky fellows etc. while on the domestic front we've been hooked on QE since 2008/09 to the tune of £900 billion.

[mikeylikey]

Bank of England raised interest rates a further 0.75% to 3% today in an effort to 'maintain the value of money' according to the BoE Governor. Seems to have forgotten that the last time inflation was in double figures in the UK it remained so for 3 years. He's desperately hoping gas prices will fall *soon* (lol) though it's inevitable interest rates will climb higher and it'll be default city here.

Obviously pissing in the wind as inflation is global, European land war, the Saudis being cheeky fellows etc. while on the domestic front we've been hooked on QE since 2008/09 to the tune of £900 billion.

The latter is really the issue. Likewise the US has printed on the order of $10t in the past decade. The inflation the banks are now fighting already happened. It may not be fully priced into consumption goods and services yet but that is inevitable. As usual, by the time the central banks realize the inflation is happening, it is too late for their main tool (raising rates) to be able to do anything about it.

[aurelius]

The latter is really the issue. Likewise the US has printed on the order of $10t in the past decade. The inflation the banks are now fighting already happened. It may not be fully priced into consumption goods and services yet but that is inevitable. As usual, by the time the central banks realize the inflation is happening, it is too late for their main tool (raising rates) to be able to do anything about it.

This ^. I was trying to explain this to someone. But nope, "Biden did it." I am kind of rooting for the US to splinter into 6-12 different countries at this point.

[quikky]

I am kind of rooting for the US to splinter into 6-12 different countries at this point.

You think stupidity can be cured by making the borders smaller?

---

The US is designed to work as a bunch of smaller countries, essentially. The federal government has grown to be so powerful, that lots of needless fighting is taking place because various groups are trying to control each through it.

[aurelius]

You think stupidity can be cured by making the borders smaller?

I'd get to pick the stupid I am most compatible with. The current situation subjects me to incompatible types of stupid.

[quikky]

You think stupidity can be cured by making the borders smaller?

I'd get to pick the stupid I am most compatible with. The current situation subjects me to incompatible types of stupid.

Well, yeah. And, that's what I was alluding to earlier: if we had less federal power, like we're supposed to, you'd get to do this without anyone wanting to file for divorce. The whole system is designed with the idea of high local autonomy so we can all have a choice of what stupidity we prefer where we live.

[GlasgowJock]

Any input from my learned American friends given recent developments with US regional banks?

My initial understanding is that in the last few months a series of American Banks have collapsed, the latest, First Republic, being mandated by the US Govt to be bought out by JP Morgan last Monday. All the indications are that upto half of American Banks are also standing into danger with god knows how many in the rest of the World.

It appears that after the last crash in 2008 the US Government, thinking it was implementing a good preventative control measure, limited exactly where US Banks could invest their money, with US Govt Bonds being one of the 'approved' safe options so most of them have cash in the same places and are equally safe/vulnerable - with the recent inflation and interest rises the US Govt has had to release new Govt bonds at a much better interest rate for investors than those most of the Banks are holding which overnight devalued the value of the bonds already in circulation which has caused a investor loss of confidence, people trying to cash in the bonds which led to liquidity crisis and at least 5 banks collapsing, so far.

The above is bad enough though a whole slew of countries have stopped buying Oil and other commodities using the Worlds Reserve Currency, the Dollar - personally, and I could be wrong, I believe this is an organised and orchestrated event led by China/Russia against the USA because it happily coincided with OPEX+ (incls. Russia) deliberately turning down its production by a million barrels a day which raised oil prices and greatly damages America and Europe who are busy financing/supporting Ukraine - the so what of that is that the world is awash with US Dollars but, if no-one uses them anymore then they have to return to America to be used which will massively devalue the US Dollar and further raise domestic US Interest rates, which in turn adds to the existing US Govt Bond valuation crisis.

[Philbert]

Any input from my learned American friends given recent developments with US regional banks?

My initial understanding is that in the last few months a series of American Banks have collapsed, the latest, First Republic, being mandated by the US Govt to be bought out by JP Morgan last Monday. All the indications are that upto half of American Banks are also standing into danger with god knows how many in the rest of the World.

It appears that after the last crash in 2008 the US Government, thinking it was implementing a good preventative control measure, limited exactly where US Banks could invest their money, with US Govt Bonds being one of the 'approved' safe options so most of them have cash in the same places and are equally safe/vulnerable - with the recent inflation and interest rises the US Govt has had to release new Govt bonds at a much better interest rate for investors than those most of the Banks are holding which overnight devalued the value of the bonds already in circulation which has caused a investor loss of confidence, people trying to cash in the bonds which led to liquidity crisis and at least 5 banks collapsing, so far.

The above is bad enough though a whole slew of countries have stopped buying Oil and other commodities using the Worlds Reserve Currency, the Dollar - personally, and I could be wrong, I believe this is an organised and orchestrated event led by China/Russia against the USA because it happily coincided with OPEX+ (incls. Russia) deliberately turning down its production by a million barrels a day which raised oil prices and greatly damages America and Europe who are busy financing/supporting Ukraine - the so what of that is that the world is awash with US Dollars but, if no-one uses them anymore then they have to return to America to be used which will massively devalue the US Dollar and further raise domestic US Interest rates, which in turn adds to the existing US Govt Bond valuation crisis.

No disagreement with the facts as you understand them. Modern banking is inherently unstable because of maturity mismatch: If I put money in my checking account all month to make payroll, the bank buys 7 year bonds with some of that money. The difference between the 7 year bond and my checking account interest rate (0) is revenue for the bank, which allows them to provide free checking accounts and other services and also to make a profit. This unstable arrangement is partially stabilized in the US by the FDIC, but if I have more than $250000 in payroll to make then that money is bare. One proposed solution is to make deposit insurance commercially available in addition to the FDIC limit, which would then allow companies to use regional banks at lower risk.

[5hout]

The BRICS revolt against the US dollar as default has been brewing for a while. The recent instability opened thebdoor wider, but it was always coming so long as we used the dollar as a weapon (especially against larger nations that have options). More than the bank failures the movement to having alternatives to dollars as a trade/reserve currency is the real story right now.

The bank failures seem to be a fairly classic "over-solving the last problem causing the next problem, but at least we solved the last one" (nota bene, recent gov actions to move the housing market towards less reliable buyers means we have not fully solved the last crisis).