Trump Pumps Fake Oil Price Crisis While Strangling Venezuelan Exports

Donald Trump sent the oil market into a tailspin Monday with one tweet claiming oil prices are too high and blaming OPEC for it. Is Trump unaware that oil prices are a function of supply and demand? Or is he deliberately shifting the blame off his destructive embargo of Venezuela?

Though it is a fact that oil prices are at a three month high, “Oil prices are getting too high,” is merely Donald Trump’s opinion.

And calling the world “fragile” and suggesting higher oil prices would be some kind of catastrophe is an alarmist narrative.

Trump is Being a Drama Queen About Oil Prices

Trump’s overly-dramatic tweet fits in nicely with the Goldman Sachs report from earlier today predicting that Brent Crude oil will go even higher to $75/bbl before the end of the year.

But trying to scare up a panic over oil prices is a cry for attention from the sitting president, one that fits in with his television persona as a tough world negotiator.

That Goldman Sachs report also said the $70-$75/bbl trading range would be temporary:

“‘While prices could easily trade in a $70-$75/bbl trading range, we believe such an environment would likely prove fleeting,’ according to Goldman’s global head of commodities research Jeffrey Currie and senior commodity strategist Damien Courvalin.”

And oil prices are determined by supply and demand. So they’re not “too high,” as Donald Trump avers. They’re at the level that reflects supply and demand.

Oil Prices are Higher Because of Involuntary Supply Curbs in Libya and Nigeria

In Libya, the National Oil Corporation refuses to start production in the Sharara oil field, the North African country’s biggest. | Source: Wikimedia Commons

One reason oil prices are higher is because of involuntary supply curbs in socially and politically unstable Libya and Nigeria.

In Libya, the National Oil Corporation refuses to start production in the Sharara oil field, the North African country’s biggest.

The facilities were recently seized by a Libyan militia group, and the oil company’s chairman says the militia has “committed violent and terrorizing acts against workers.”

In Nigeria, contentious political elections underway now have dampened the country’s oil production. Western military interventions have destabilized both countries.

Libya and Nigeria Are Both Obama and Clinton’s Fault

The Obama administration’s regime change intervention in 2011 is partly to blame for the oil crisis. | Source: U.S. Navy

That includes a bill signed by President Obama in 2016 to station U.S. military boots on the ground in Nigeria, stirring up more armed conflict there.

It also includes the Obama administration’s 2011 regime change intervention in Libya, backed by British and French intelligence, as well as U.S. air power.

The result was an unmitigated catastrophe of violent civil disorder, warring factions, and a deluge of new terrorist recruitment, training, and planning in the power vacuum left by the relatively stable, secular government of Muammar Gaddafi.

What makes the intervention in Libya all the more baffling is what a close partner Gaddafi had been with both the Bush and Obama administrations in the Global War on Terror/Overseas Contingency Operation after 9-11.

So the previous administration and both major political parties in Washington deserve their share of the blame for the 300,000 barrels a day that aren’t pumping through Sharara.

Venezuela is Trump and Bolton’s Fault

Nicolas Maduro Petro
Donald Trump himself is to blame for high oil prices, given his administration’s intervention in Venezuela. | Source: Shutterstock

Oil prices are also higher than they would have been otherwise as a result of Donald Trump’s own half-baked geopolitical interventions as president of the United States.

Most notably, the White House blockaded oil shipments to and from Venezuela with an embargo on Venezuelan oil last month.

In a research note Monday, Goldman Sachs said the disruption in oil supply from Trump’s embargo on Venezuela is likely to reach as high as 300,000 bbl/d in the coming months:

“While the decline in net exports has been softened so far by the use of domestic light crude for blending, we believe Venezuelan disruptions are likely to accelerate in coming months to potentially 200-300 kb/d if no political resolution occurs.”

At today’s OPEC Reference Basket price of $66/bbl, that’s $6.8 billion worth of oil annually that Donald Trump is personally responsible for keeping stuck in Venezuela.

So if the world is really so fragile that it can’t take an oil price hike, then instead of telling OPEC to loosen up and take it easy, Donald Trump should take it easy on Venezuela.

Donald Trump Image from AFP PHOTO / JIM WATSON


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Author: Wes Messamore
Image Credit: Source: AFP PHOTO / JIM WATSON

Cryptocurrencies To Benefit as Trump’s Trade War Intensifies

The US is set to impose additional tariffs against multiple countries in the coming days. The latest one is set to go live today which will impose additional tariffs of $34 Billion for products imported from China. China has also threatened to retaliate by adding tariffs of $34 Billion on American imports. To this, Trump has vowed to add $200 Billion tariffs if it happens.



US’s trade war is not just with China. Trump has also threatened the EU with more Tariffs. If that goes through, the EU is already ready with a new set of duties for American products worth approximately 18 Billion Euros.The US has already imposed additional taxes on Indian products. India has now responded with $231 Million tariff hike on 30 US products.

The global economy is at a low, with multiple currencies at their lowest point. Indian Rupee, for the first time in 5 years fell down below Rs. 69 last week. Chinese Yuan has also taken a substantial hit. Yuan has fallen down by 10% since April 2018 after Trump announced the tariffs. Shanghai Stocks have also gone down by 25% in 2018 alone.

Cryptocurrencies thrive when countries battle uncertain economic policies. Bitcoin saw a significant uptick when Brexit happened last year. Similarly, Chinese traders flocked to cryptocurrencies when the Yuan was devalued a few years ago. However, this time around the Chinese government has banned the trade of cryptocurrencies. But the trade still continues, in a peer-to-peer, OTC manner instead of exchanges.

As The US goes on a trade war with multiple countries, the value of national currencies are expected to come down, including the US dollars. Investors are going to look for alternate ways to store their wealth. Traditionally, precious metals like gold and silver have been used. But acquiring gold is not easy. Once acquired, it is even harder and expensive to securely store them.

Cryptocurrencies, especially Bitcoin is often referred to as digital gold. It is scarce. The total supply of Gold is unknown. But the total supply of Bitcoin is fixed at 21 Million. Securing Bitcoins is also as easy as securing a tiny hardware wallet. It takes a good while to move Gold from one country to another. Bitcoin, on the other hand can be sent instantly for a tiny fee. Just last week, $500 Million worth Bitcoin was transferred for just $2!

Cryptocurrencies are extremely volatile. So we may not see investors go full on cryptocurrencies yet. However, smart investors with an appetite to diversify have been actively investing in Bitcoin and other cryptocurrencies. It is set to increase as economic instability impacts multiple countries from the trade war that the US has just started.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Vignesh S
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Russian Parliament Approves First Readings of 3 New Crypto-laws.


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Russia’s parliament, the Duma, has overwhelmingly voted in favor of the draft cryptocurrency-themed On Digital Financial Assets bill, with 410 MPs voting in favor, and only one voting against, per media outlet Novaya Gazeta.

According to the Duma’s official website, the Russian parliament also voted in favor of two parallel bills, one on “digital rights” and the other on crowdfunding.

The bills will open the door for crypto and blockchain regulations to be imposed by financial authorities, and will give legal definition to key crypto-terminology, such as smart contracts, mining and cryptocurrencies.



The Duma website quotes Pavel Krasheninnikov, the Chairman of the Committee for State Development and Legislation, as saying the three bills will now be debated together for their second reading, allowing for “conceptual and regulatory synchronization.”

Anatoly Aksakov, the head of the Duma’s Financial Markets Committee, presented the three bills at a plenary meeting of the Duma, and noted, “By defining concepts [such as cryptocurrency, and so on], we will be able to provide legal protection for the users of these tools.”

A Russian appeals court has already decided to recognize cryptocurrency holdings as legal “property” in a high-profile case, saying that it had based its decision on the government’s bill. Some politicians, meanwhile, have called for key amendments to be made to the bills before they pass into law.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Tim Alper
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The Bulls Are Back, Trump’s Petro Ban Backfires and Karmic Justice: This Week in Crypto

Price Watch:

  • Bitcoin is up 15% this week after a slight gain last week and a nearly 20% drop the week before. After stabilizing at $7,100 earlier this week, the price rocketed above $8,000 in a dramatic green candle. The price has hit a sell wall over the $8,00 mark, but analysts are optimistic. For the first time in a few weeks, we’ve seen major personalities revealing huge price targets in a manner similar to the end of 2017. Despite the price rise, bitcoin dominance fell slightly marking a reversal of last weeks gains.
  • Ethereum is up 30% this week. The currency was flat last week and experienced several weeks of double-digit drops in the weeks prior. Technical analysts are optimistic that the rally will continue. Those more keen on fundamental analysis will point to Golem going live this week.
  • The entire crypto market gained 20% this week briefly bringing the total market cap over $325 billion. This comes after early gains of $20 billion earlier in the week and is no doubt due to bitcoins fantastic price rally earlier this week. The dramatic gains come after several weeks of the price staying sideways at the $250 billion level.

Crackdowns:

  • Trump’s crackdown on Petro backfires: A Venezuelan government representative thanked Trump for the free publicity that came from his ban on Petro. The representative further claimed that Trump’s executive order has even managed to raise investor interest in the U.S. These statements should be taken with some hesitation, as the Venezuelans are suspected of making false statements surrounding the “$5 billion” raised by Petro’s presale earlier this year. In any case, Venezuela has made some bold predictions for the future stating Petro’s impact would be felt within “three to six months“.
  • Pakistan banned banks from transferring cryptocurrencies this week in a move that closely followed neighbor and on-again-off-again enemy India’s ban last week. The move in Pakistan is expected to be just as controversial (and ambiguous) as India’s. The move follows similar actions by Bolivia, China, Ecuador, Colombia, Russia, Vietnam, Bangladesh, Nigeria, and others although these bans have taken various forms.
  • JP Morgan sued over fees: In what has been called a form of karmic justice for J.P. Morgan CEO Jamie Dimon who called bitcoin a “fraud”, the firm he runs has been hit with a class action lawsuit surrounding hidden fees users incur when using credit cards to buy Bitcoin.
  • Bitfinex investigated over money laundering: Polish authorities have revealed that Bitfinex has been implicated in an investigation into the laundering of zł 1.27 billion Polish złotys (~$371 million). The laundered money is said to belong to Colombian drug cartels. Colombia banned cryptocurrencies in late 2016 citing money laundering concerns.

Forks:

  • Nano lawsuit demands fork: A class action lawsuit filed by victims of a breach against exchange BitGrail aims to force the developers of Nano (XRB) to create a hard fork which would return lost assets to investors. Normally security is the asset holders responsibility, but the developers appear to have explicitly endorsed the exchange citing a close relationship with BitGrail founder. Questions have been posed over whether or not the attack happened and many have pointed fingers exclusively at BitGrail. If this lawsuit is won by the plaintiffs it could set a dangerous precedent for future hacks.
  • Vitalik opposes hard fork that would stop ASIC mining: After EIP  that sought to slow down Ethereum centralization by stopping ASIC miners became wildly popular, Ethereum co-founder Vitalik urged the community to exercise some restraint. With the memory of Moner’s 5x hard fork , it’s completely reasonable to fear a split in the community and a detraction from “more important things”.

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Jake Sylvester
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Chinese Exporters Scramble to Cope with Trump Tariff Hike

Facing a possible U.S. tariff hike, one of China’s biggest ball bearing makers, Cixin Group, is weighing plans to rush shipments to American customers before the increase makes its sales unprofitable.

The company in the eastern city of Ningbo is among exporters of goods from motorcycle parts to electronics that are scrambling to cope with President Donald Trump’s higher duties by shipping early, raising prices or finding new markets.

The 25 percent increase would turn Cixin’s profits to losses in the U.S. market, which takes 30 percent of its exports, according to Wang Liqiang, a company manager.

“We are considering manufacturing as many ball bearings as possible for the U.S. market before the imposition of tariffs,” said Wang. “We can do it by working overtime.”

Some companies are looking at ways to hide their Chinese origin by shipping goods through other countries.

“Maybe customers will buy from South America, and then South America sells to the U.S.,” said Yvonne Yuan, a sales manager for Shenzhen Tianya Lighting Co., a manufacturer of LED bulbs.

Trump says higher duties on $50 billion of Chinese goods are meant to punish Beijing for stealing or pressuring foreign companies to hand over foreign technology.

The plan targets goods U.S. officials say benefit from improper Chinese policies including machinery, industrial components and aerospace, telecoms and other technology.

Trump left time to negotiate. A public comment period runs through May 11, with a hearing scheduled May 15.

Economists and Chinese officials say the tariff hike’s overall impact on China should be limited. But for exporters that depend on the U.S. market, the potential costs are alarming.

Knock-on effects could greatly increase the impact, Moody’s Investors Service researchers said in a report. It said that Chinese manufacturers that supply inputs to targeted sectors would see reduced demand and more pricing pressure, spreading the effects of tariffs deeper into the Chinese economy. Manufacturing and processing of metals and metal products, as the key input sectors for technology-product manufacturing, would be hurt the most.

Chinese exporters supply most of the world’s mobile phones, personal computers, televisions, toys and other light manufactured goods from thousands of factories.

They are flexible and resourceful but many are struggling with higher costs and slowing demand. China’s total exports last year rose 7.9 percent, down from the heady double-digit rates of the past decade.

The United States buys about 20 percent of China’s exports. But Americans are especially important to exporters because they buy electronics and other high-value goods, including many targeted by Trump’s tariffs.

Some exporters already are reeling from previous U.S. tariff increases of up to 500 percent on washing machines, solar modules and some metal products, meant to offset what the Trump administration says are improper subsidies that allow them to sell at unfairly low prices.

Others are confident American customers cannot do without them.

Makers of motorcycle components plan to use that leverage to ask buyers to split the cost if tariffs rise, said Pan Jianle, an official of the Motorcycle Parts Association in Wenzhou. She said they export worldwide but the United States is their No. 1 market.

“The U.S. motorcycle parts industry relies heavily on China,” said Pan. “It is difficult for U.S. customers to find products with good quality and value for money from other places.”

Such a politically charged conflict has left companies and local Chinese officials jumpy.

Pan declined to provide the value of exports of motorcycle components to the United States. A few hours later, the Wenzhou city government’s foreign affairs office called AP to ask about its interviews.

Electronics manufacturers also plan to ask buyers to share higher costs, said Li Zengyou, secretary general of the local manufacturing chamber of commerce in the eastern city of Zibo in Shandong province.

Zibo’s electronics exports to the United States last year totaled $1 billion, according to Li. That would mean if the tariff hike applied to all their sales, it could add $250 million to the cost.

If higher tariffs hit, “they will raise the price,” said Li. “If the U.S. customers failed to accept it, they would stop exporting to the United States and turn to explore other markets.”

Ningbo-based Cixin Group’s margins in the United States are about 10 percent, which would be wiped out by a 25 percent tariff hike, said Wang. The company also exports to Europe and Latin America.

“We can’t bear all the costs,” he said. “We can try to increase our exports to other countries, but it is not easy to establish a long-term relationship with new customers.”


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Joe McDonald
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President Xi Jinping Vows to Further Open Chinese Markets

Chinese President Xi Jinping promised foreign companies greater access to China’s financial and manufacturing sectors, pledging Beijing’s commitment to further economic liberalization amid rising trade tensions with the U.S.

In a speech that officials had billed as a major address, Mr. Xi said Tuesday that plans are under way to accelerate access to the insurance sector, expand the permitted business scope for foreign financial institutions and reduce tariffs on imported automobiles and ownership limits for foreign car companies.

Throughout his 40-minute address, Mr. Xi never mentioned the trade friction with the U.S. or President Donald Trump. His remarks seemed designed to offer some policy initiatives, if not concessions, while drawing a contrast with President Trump’s “America First” agenda and portraying China as a steady global partner committed to the international trade order.

“In a world aspiring for peace and development, the Cold War and zero-sum mentality look even more out of place.” Mr. Xi told the Boao Forum, a government-backed gathering of business and political leaders on the tropical island of Hainan.

“Putting oneself on a pedestal or trying to immunize oneself from adverse developments will get nowhere,” he said.

Washington and Beijing’s trade spat has become a source of financial-market turbulence in recent weeks and raised concern about an outright trade war that could drag down the global economy. President Trump has threatened to slap tariffs on as much as $150 billion in Chinese products, in an effort to cut the bilateral trade imbalance that the U.S. says favors China by $375 billion. Beijing, on the other hand, vowed strong retaliation and blamed the U.S. for wrecking global trade order.

In apparent, if unacknowledged, answer to some of the U.S.’s criticisms, President Xi said China would increase imports, improve the protection of intellectual property and provide a more transparent, rule-based environment for foreign investment. He also pointed to Beijing’s announcement late last year that it would raise foreign-equity caps in the banking, securities and insurance industries, and promised those measures would be implemented.

“We have every intention to translate the measures into reality sooner rather than later,” Mr. Xi said, though he didn’t provide a clearer timetable for those or the other measures announced.

Many of the initiatives Mr. Xi offered up have been previously proposed. That, along with the lack of definite schedules for action, drew some skeptical reviews from foreign business executives and Chinese researchers alike.

Those factors also left the speech falling short of its billing by Chinese officials, who had said Mr. Xi would offer up important policy changes in suitable commemoration of the launch of China’s market-oriented reforms 40 years ago by former leader Deng Xiaoping. Those earlier reforms allowed China to benefit from globalization, paving for the country to become the world’s factory floor and, as Mr. Xi noted in his speech, the world’s second-largest economy and biggest trading nation.

Still, given the tit-for-tat tariff threats, some saw reasons for cautious optimism in Mr. Xi’s remarks. “President Xi was trying to strike a balance today,” said Myron Brilliant, executive vice president of the U.S. Chamber of Commerce. “President Xi spoke in terms of China’s own need and commitment for market reform and liberalization, but no doubt he was also sending a signal to the U.S. government that he wants there to be cooperation and dialogue, not conflict and a trade war.”

“Whether this message can help defuse bilateral trade tensions, we will see,” Mr. Brilliant said.

At the heart complaints by the Trump administration, as well as among some officials in Europe, are policies they say are at odds with Beijing’s earlier era of market liberalization. They point to continuing restrictions to access to the country’s market, as well as Beijing’s industrial policies that they say favor state-owned firms at the expense of private and foreign-owned ones.

President Trump has taken particular aim at what the U.S. calls unfair Chinese practices that force American companies to transfer technology and that permit cybertheft. In announcing a plan earlier this month to slap new levies on $50 billion of Chinese goods, the White House singled out items in biomedicine, aerospace, new-energy vehicles and others, mainly key components in a government initiative known as “Made in China 2025.” The program, backed by Mr. Xi, is designed to make China dominate the frontiers of manufacturing in coming decades.

China has denied such allegations and responded in kind, mainly targeting products made by farm states that helped Mr. Trump win the election in 2016.

While China has benefited from globalization, Mr. Xi and his government are in many ways ambivalent about unfettered interaction with the rest of the world. Mr. Xi is an unabashed nationalist, who believes in the Communist Party’s right to rule and resents the West’s lecturing on democracy, according to Chinese officials and analysts. Mr. Xi has sought to bulk up state-run companies and kept China’s internet isolated behind its Great Firewall.

Previous Chinese leaders, including Mr. Deng, sought to use foreign investment and competition to spur changes within the country. Under Mr. Xi, some Chinese officials and analysts said, the days when Beijing would make concessions to foster change are now gone.

“This time is different,” said Li Yang, chairman of the National Institution for Finance and Development, a government think tank in Beijing. Mr. Li pointed to the declining share of trade in China’s overall economy.

“We’ll open up the economy according to our own pace,” he said.

 


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Lingling Wei
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