#Jim Rickards #silver #gold #economy @economy_news (economic news)
Jim Rickards is an American lawyer, economist, and investment banker with extensive experience in capital markets. He is best known for his commentary on the financial markets and his predictions regarding economic crises and currency wars. Rickards has authored several books, including “Currency Wars: The Making of the Next Global Crisis” and “The Death of Money: The Coming Collapse of the International Monetary System,” which discuss his views on the global financial system and potential economic threats. He is often sought after for his expertise in financial markets, gold, and economic forecasting.
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2024 has arrived and numerous individuals are posing The Identical inquiry what’s going to transpire this anom what are some significant forecasts what are some unexpected events that I should be vigilant about that’s the reason we have our specialist in Grand predictions on stage Jim rickords a gentleman who predicted
Trump’s improbable Triumph the brexit he’s been preceded ing all the rate augmentations of 2022 stock market downturns he exposed the Sham of econ news he invented the phrase Biden currency this gentleman is at the Forefront of numerous matters and presently we are eager to comprehend his perspective on
2024 Jim it’s known that you fancy a Duo of stocks and you possess a momentous forecast and energy catastrophe might be unfolding leading to an economic slowdown this connects to your scam theory on econ news and what Biden along with the Democrats are executing in the
United States so let us proceed what are those Duo of stocks and what’s your momentous forecast for 2024 well I’ve got two um two predictions but want to kind of broaden it a little bit I’m uh my my recommendation is um I have two uh stock Chevron uh New York Stock Exchange ticker
Cbx uh and Exon Mobile uh New York Stock Exchange ticker XOM and when you say okay I’m recommending energy companies people go well that must mean oil prices are going to go up a lot because you know it’s good for energy stocks um and I just gave a recession deflation scenario so
How do you kind of reconcile those two things this want to spend a couple minutes on Energy prices in general and why I like those two stocks whether oil prices go up or down and again I’ll explain why um energy Market is extremely difficult to analyze uh but
One of the reasons for that is because there’s a huge Market manipulation political component to it so it’s a long list of factors we would look at um you know obviously we look at supply and demand broadly speaking geopolitical factors including relations between us Iran us and Saudi Arabia other key linkages
Between Saudi Arabia and China uh you got to look at interest rates exchange rates pumping Logistics Transportation Logistics new oil discoveries refiner capacity new technology and of course you know fracking Revolution is old old news at this point but that’s an example of how technology really can revolutionize the uh the industry and
These factors have to be put in the context of geopolitical unrest including the war in Ukraine the war between between Hamas and Israel the chances of escalation um in both of those Wars to the point of use of nuclear weapons and the financial SE Financial sanctions which have been wrapped around Russia
And the rest of the world as a result of that and uh I’m not a meteorologist but I always say don’t don’t forget the weather the uh Russians have a name for weather they call General winter uh General winter is one of their commanding officers and the Russians
Know how a fight and winter and most most armies don’t so um that that gives them an advantage um last year Europe skated through what could have been been an energy disaster because it was a fairly mild winter and they took some steps to increase their natural gas
Imports and um by the way Europe is still buying enormous amounts of natural gas from Russia as much as any Russia’s hard currency revenues from energy sales oil and natural gas are at all-time highs so don’t believe what you read in the New York Times they’re not starving
They’re not shut out of the markets uh the boycotts don’t don’t work the the sanctions don’t work and they’re still selling plenty of energy um to Europe and by the way the pipelines go through Ukraine it’s like you know the the Russians are paying ukrainians usage fees to run the pipelines and Europeans
Are paying the Russians for the energy in the middle of a war between Russia and Ukraine so I guess we’re we’re financing both sides but nothing particularly unusual about that um so but my point is my bigger point is every factor I just mentioned I’m not repeat
Them all but you know interest rates exchange rates Wars geopolitical Etc they can apply to any analysis they could apply to any stock or any commodity so what is it that is really special about the energy Market I mentioned at the beginning it’s it’s the big three it’s United States Russia and
Saudi Arabia they those three countries produce a a little over 30% of the total total oil supply in the world they dictate the prices there’s no question about it um not just Saudi Arabia by the way us and Russia are are uh a very big part of that so it’s Market manipulation
By sovereign states that sets oil apart from almost any other market oil is is the blood in your system you simply can’t do it without it if you if we have a copper shortage okay the price goes up construction slows down mining output maybe increases you you do something
About it but you muddle through it’s not the end of the world with energy it’s different with shortages develop the lights go out heating systems fail air conditioning goes off the power grid can collapse Transformers explode and Military capacity can be highly degraded people die that’s what happens when
There’s an energy shortage so um it’s really up to the the big three to make sure that that that that doesn’t happen my point being energy is too important to be left to markets of course markets play a role but um uh but the geopolitics of those three countries
Deciding what’s in their best interest now right now we have uh a very good example of that which is Saudi Arabia has reduced output and encouraged others to do likewise to prop up the price um why are they doing that well they’ve got goals they want oil to be around $75 a
Barrel they might love it to be higher but they need it to be $75 a barrel because that’s how much revenue they need based on output just to meet their budget I mean they’ve got got a lot of MTI feed um as the saying goes the fundamental case oil prices is weak so
I’ll come back to the geopolitics but the fundamental case uh you know with WTI Futures on NX hit 9368 per barrel on September 27th just a few months ago um therea dropped to 8231 on October 5th 12% drop in one week little bit of a
Rebound on the um the Massac Cur of Jews on October 7th uh but that once it appeared that that was sure it was a war between Israel and Hamas but it the fear of escalation dialed down a little bit so the decline of all prices continue uh
And and we were at um uh 6950 a barrel today that’s a peak to trough drop of 26% from the late September High that’s the trend and it’s consistent with everything else I just said which is that inflation is coming down not for good reason inflation is coming down
Because we’re heading into recession when you get into recession you should expect commodity prices to drop and oil prices uh to drop with them the recession signs are real the growing worse credit contraction rising bad debt increasing jobless claims collapsing commercial real estate markets Contracting World Trade invert yield
Curve yield curves a number of other technical indicators in fact as I mentioned the recession may already be here um interest rates um an economic downturn initiates and numerous individuals fail to grasp this however this extends you comprehend extend your chronological data as far back as you desire uh mention would you when
Entering an economic downturn don’t borrowing costs decrease eventually they do but at the outset they escalate because um you realize income is evaporating profit margins are shrinking Enterprises require operational funds uh so they actually seek loans exhaust their credit facilities Etc this tends to uh Elevate borrowing costs when the
Downturn has already commenced but then within a few weeks of the downturn as situations worsen indeed then borrowing costs decrease because unpaid debts accumulate fincial institutions uh strengthen their lending criteria Etc so the reality that borrowing costs have peaked um around November 1st was uh the
Zenith in the US the yield of maturity on the decade long treasury bill which is an excellent indicator everyone observes leor you know or overnight charges repurchase agreements rates s which uh you comprehend Etc that’s crucial for leveraged investors for hedge funds even for banks if you’re financing things in an overnight Market
But if you’re acquiring uh if you’re obtaining a home loan uh if you’re engaged in construction if you’re making a long-term fixed asset investment the decade long note is a far superior indicator those are 5 to 10e prospects and that’s how you must contemplate financing them in the bond market so
That peaked around November 1st it’s been declining which indicates to me that the downturn has already initiated consistent with the consumer applying the breaks in uh in October so if that were that’s a plethora of information but if that were all we possess you’d just remark hey petroleum prices
Are declining might drop to $45 per barrel that would not be an unexpected event under those circumstances but this is where Market manipulation plays a role I mentioned Saudi Arabia desires elevated oil prices the US desires elevated oil prices for entirely different motives we have the environmental news hoax running
Constantly um Biden exhausted the Strategic petroleum Reserve um so now but now they’re going to replenish it at elevated prices you know it’s typical uh typical Biden um strategy but the point is the environmentalists you know Jennifer Graham Secretary of Energy uh Biden and the others they desire
Escalated Energy prices sorry they want escalated oil and gas prices because they’re attempting to force electric vehicles on everyone they’re uneconomical by the way the Pinnacle of electric vehicles was 1910 they were quite prevalent between 1900 and 19 10 they were invented in 1837 the only ones
Employing them in the 1950s were the East German Postal Service they had a collection of electronic Vehicles there’s a rationale why the electronic vehicle became obsolete in 1910 batteries guess what hasn’t transformed uh yeah batteries slightly more efficient but you know you need to Halt
Every this 300 M step forget it I mean and individuals Overlook that in the winter you know I possess a 6-cylinder 24 valve 100 sorry 350 horsepower motor but uh when I require warmth in my car it’s graus because the motor’s hot so they just channel the heated air into
The cabin and ah and I stay cozy if you require warmth in an electric vehicle in a Tesla guess where it originates from it originates from the battery so you know you thus that’s how they operate the heater so you’re depleting your battery quicker you can’t even travel as
Far they have all sorts of issues but uh like I say it’s an anti equated technology except for golf carts so I’ll concede that an electric golf cart is an effective method to utilize it but um but the government’s promoting them uh as a matter of policy ideology really
And so they necessitate higher petroleum prices to make the markedly inferior alternative appear more appealing by comparison thus the US has got a grievance to air of course Russia desires elevated petroleum prices as they’re engaged in a conflict us so you the primary Trio each have their distinct reasons for driving prices
Upwards oh what could cause petroleum prices to soar well you understand a howy missile striking an oil tanker um in the uh vicinity of the Gulf of Aiden or the Red Sea um the conflict in Israel uh Gaza intensifying to the extent where you must neutralize the Iranian Navy
Which Ronald ran did incidentally that’s not far-fetched he actually sank numerous Iranian Navy vessels ran countering by obstructing The Straits of Hormuz Hezbollah intens ification they’re a closer Iranian surrogate than Hamas Hamas is on the payroll but Hezbollah is the real Shiite a Shiite segment of the um the Shiite Crescent as
They term it um and um they’ve been escalating their actions and the how this you know of course Biden remove them from the terrorist watch list good job Joe they’re the ones launching drones at Israel and aiming at tankers and Commercial vessels uh in the Red Sea so that escalation potential exists so
Just to encapsulate the higher price sorry the lower price factors essentially boil down to one thing which is recession I could enumerate 20 reasons why we’re in a recession but that summarizes it the higher price factors Russia the US and so forth all have their individual motives for higher
Prices we might be facing a particularly harsh winner I believe the weather might favor higher energy prices this year Financial sanctions and the environmental news hoax so um so then reverting to Chevron Exon Mobile like well okay Jim which is it higher or lower petroleum prices I just outlined
Two scenarios where the probable outcome is significantly lower petroleum prices but you cannot ignore the possibility for substantially higher petroleum prices based on one or more of those factors materializing so don’t you have to select one or the other to endorse the energy stocks Chevron and Exxon
Mobile the response is no because they flourish in both scenarios they’re substantial companies they’ve got ample planning they’ve got abundant Capital expenditures they’ve got numerous strategies they can employ the straightforward one is higher energy prices yeah that will undoubtedly benefit by the way just before I
Conclude I should declare I do possess a minor stake in Chevron uh and so just lay that out I will not divest it without alerting all our readers I have no plan to divest at the moment but if that changes and I decide to sell it I
Won’t execute the sale before we inform our reader so everyone will be forewarned if when the moment arrives uh but that said yeah yeah higher petroleum prices clearly Advantage Chevron xon mobile but lower petroleum prices can Advantage them too because you can’t examine any single factor in isolation a
World of disinflation a world of recession where Energy prices are declining guess what else is declining their expenses uh so so borrowing costs they incur um you know Workforce expenses Transportation expenses Etc so the margins can actually widen and that’s how you assess a stock fundamentally their margins and uh
Unprofitability in addition to that Chevron and Exxon Mobile have both announced significant Acquisitions in the past half year that they haven’t finalized yet they’re in the process of concluding but there are vast economies of scale that will emerge from that that have not been entirely incorporated into
The stock price so in a world of recession and lower petroleum prices you’re going to have reduced cost economies of scale the stocks will perform well in a world of higher petroleum prices irrespective of the economy unraveling uh they’ll perform even better so I favor them in both scenarios awesome thanks for your
Perspective Jim we appreciate it there could be a recession there could be ascending prices and those stocks will function either way we appreciate it well everyone at home thank you so much for tuning in 2024 is unfolding here it is and if you desire the insights that nobody else is disseminating please
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