According to inside media sources, Saudi Arabia was under the impression the Biden administration was going to begin refilling the U.S. Strategic Petroleum Reserve two months ago. However, the Biden administration made no efforts to do that.  As a consequence, Saudi Arabia and OPEC+ which includes Russia, decided to cut production in line with diminished global energy needs as a result of a slower global economy. {Background Here}

Tucker Carlson outlines the ramifications of increased oil costs on the American electorate {Direct Rumble Link} while his guest Brian Brenberg from Fox Business News, accurately points out that Joe Biden wants to keep energy prices high to support his climate change policy initiatives. WATCH:

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Before getting to the headline, I want to remind you what CTH outlined two years ago about these massive food price increases.

You might remember me saying that processed food prices will increase at a much greater rate than fresh or lesser processed foods.  Factually, even organic products (ie. produce) could/would end up less expensive (in relative terms) to the increase in price at your supermarket, as compared to the price increases for the more processed foods.

The reason is simple, processed food use more energy; energy prices are skyrocketing; the processing costs (packaging, transportation, freezing, sanitizing, storage, warehousing and distribution etc.), at each step of the processing cycle, in addition to higher labor costs, drive up the end result of the price.

In this energy driven inflationary environment, less processing and handling equals lower overall cost increases from field to fork.  More processing, handling, distribution equals higher overall costs.  This is simply a supply chain, truism.

Into this issue comes McDonald’s Corp.  Last I heard, approximately 85% of McDonald’s business was franchise.  The franchise has to purchase the product (food) from the main company.  Supply side cost increases in the food are transferred from the company to the franchisee via higher product costs.  The restaurant is then forced to raise prices to accommodate their increased costs.  A portion of the revenue from sales then flows back to the main company.

It is important to note here, there is a natural disconnect in supply side price increases within the franchise model.  The parent company must, must, negotiate the best possible contract terms with the suppliers because the increases in costs are passed directly to the franchise.  The parent company doesn’t immediately feel any problem until the revenue from the franchise drops due to the forced raising of retail prices and diminished sales.  There is a lag.

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Despite the fact the Western Alliance have created the policy that will deliver pain to their citizens, not a single government leader will look at this move as a bad thing.

The pain will not be felt by the elites, it will only hit the citizenry.  Lowered oil production outputs that drive up gasoline prices and fuel inflationary drivers, expedite the Build Back Better narrative and objective.

However, that said, in context to this announcement, a pain that will hit the Western economies of the alliance represented in yellow, the last 18 months of moves by Mexico makes President Andres Manuel Lopez-Obrador look remarkably prescient.  The new strategic relationships and trade partnerships between China, Russia, Iran, Saudi Arabia, India and beyond, take on an added geopolitical dimension.

DUBAI, April 2 (Reuters) – Saudi Arabia and other OPEC+ oil producers on Sunday announced further oil output cuts of around 1.16 million barrels per day, in a surprise move that analysts said would cause an immediate rise in prices and the United States called inadvisable.

The pledges bring the total volume of cuts by OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, to 3.66 million bpd according to Reuters calculations, equal to 3.7% of global demand.

Sunday’s development comes a day before a virtual meeting of an OPEC+ ministerial panel, which includes Saudi Arabia and Russia, and which had been expected to stick to 2 million bpd of cuts already in place until the end of 2023.

The latest reductions could lift oil prices by $10 per barrel, the head of investment firm Pickering Energy Partners said on Sunday, while oil broker PVM said it expected an immediate jump once trading starts after the weekend.

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Two major energy trade developments today highlight how the Western Alliance is quickly losing a grip on the world energy market, as an alliance between China, Russia, Iran and the Middle East Gulf Cooperation Council starts to take shape with actual trade exchanges that are not in dollars.

Last year, in response to big panda’s own interest and seeking to exploit two western alliance self-created weaknesses; (1) sanctions against Russia and (2) weakened investment in LNG production; China spearheaded the Shanghai Petroleum and Natural Gas Exchange.

The exchange was aimed at group purchasing services for liquefied natural gas (LNG) though the use of the yuan to replace the dollar.  Essentially, team Gray operating without the global trading system of team Yellow (map).  The Shanghai exchange allows purchases of LNG portions by small and medium-sized buyers in yuan.

Today, CHINESE national oil company CNOOC and France’s TotalEnergies have completed China’s first yuan-settled liquefied natural gas (LNG) trade through the Shanghai Petroleum and Natural Gas Exchange, the exchange said on Tuesday (Mar 28).

Approximately 65,000 tonnes of LNG imported from the UAE changed hands in the trade, it said in a statement. TotalEnergies confirmed to Reuters that the transaction involved LNG imported from the UAE but did not comment further. (read more)

This exchange between the UAE and France is taking place without dollars. If the process continues the dollar weakens.  In the geopolitical world of currency valuations and trade, this might be considered the Archduke Ferdinand moment for the end of the petrodollar.  The question will become, can they grow this process with OPEC+ support and begin eventually trading oil in yuan?

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Put this in the ‘how far can we stretch a narrative’ file.

According to multiple sources, Ukraine is running out of ammunition in the war against Russia.  However, according to Newsweek who is pushing the message from the Nordic Ammunition Supply Company, TikTok cat videos are to blame.   Yes, you read that correctly…

(Newsweek) – One of Europe’s largest ammunition manufacturers has said it’s unable to expand to meet new quotas and respond to Ukraine’s increased demand because a nearby data center is using up all the electricity in the central Norway region to store TikTok videos.

The Norwegian group Nordic Ammunition Company, better known as Nammo, told the U.K. newspaper Financial Times that there’s no surplus of energy for its Raufoss plant, where the new factory was planned.

The electricity of the region is being used up by a data center whose bigger client is TikTok. The embattled social-media platform has come under increased scrutiny in the U.S. for its ties with China. “We are concerned because we see our future growth is challenged by the storage of cat videos,” Nammo chief executive Morten Brandtzæg told the newspaper.

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At a certain point in the economics of the great pretending cycle, one must wonder what circles they live in.

Fed Chair Jerome Powell announced another quarter-point interest rate hike and simultaneously noted the banking crisis will likely lead to tighter credit and borrowing for businesses on Main Street…. thereby further reducing the U.S. economic output.  Yet here we are again, and not a single economic or financial pundit is even talking about the origin of the inflation the Fed action is pretending to address, the spike in energy prices.

At the core of the Biden policy issue that creates inflation, is the energy policy that has driven oil, gas, home heating, electricity and manufacturing/farming costs through the roof.  The blocking of energy resource development/production is the top issue leading to massive increases in consumer prices overall.  The Biden energy policy is entirely ignored by a federal reserve attempting to shrink inflation.

Follow the bouncing ball of consequence.

Biden restricts energy development [Main St Suffers].  Prices skyrocket [Main St Suffers]. The fed raises interest rates in an effort to reduce the economic activity to meet the lowered production of energy resource development [Main St Suffers].  The result of the interest rate hike creates liquidity issues for banks holding treasury securities [Main St Suffers].  The banks then reduce credit lines, reduce lending and tighten borrowing to match their lowered liquidity [Main St Suffers].

The Fed then notes further increases in rates may pause as they await the outcome of restricted banking credit and lending from the rate hikes previously installed.  Nowhere in any of this is anyone talking about the nucleus of the issue – the stupid energy policy.  The great pretending continues in the West, while smiling panda lunches with Vladimir Putin.

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Let it not be said that Mexican President Andres Manuel Lopez-Obrador (AMLO) does not understand what the Biden administration is attempting in the recent criticism and passive aggressive posturing toward Mexico.

Yesterday, AMLO was outlining a specific set of infrastructure initiatives that are ongoing.  Three new oil refineries together with new railroads and highways are under construction as the government continues positioning itself for energy independence. [Video Here]  However, it’s what he said after the energy remarks that’s really stunning.

The energy plan, which runs counter to the expressed demands of Canada and the United States, includes two regional ‘green’ refineries that will have the ability of turning used cooking oil into fuel.  However, the plan also includes new oil refinery capacity that will permit cheap gasoline independent of the need for Mexican oil to be refined in Texas and returned.

All of the refinery projects are on schedule to be completed by the end of this year and into 2024.  In essence, Mexico will have very cheap gasoline and diesel fuel in the near future.  This was previously outlined as a goal by AMLO in July 2022, and is against the interests the Biden administration.  Now those plans are becoming a reality.  Mexico is not joining the North American suicide mission of windmills, solar panels and reliance on unstable green energy.

Ever since the July 2022 Oval Office press conference at the White House, CTH has been saying to keep an eye on Mexico, because these energy plans align more with the BRICS nation agenda than the goals and objectives of the World Economic Forum (western nations).   It is not accidental the U.S. government, including our intelligence agencies and DHS, has been seeding a negative overall impression of Mexico ever since.

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Stunningly, the Polish Ambassador to France Jan Emeryk Rościszewski said yesterday: “Either Ukraine will defend its independence today, or we will be forced to enter into this conflict,” sending a clear message that NATO will enter the war against Russia if Ukraine loses ground.

Rościszewski essentially said the quiet part out loud, and that public statement immediately caused the NATO allies to recoil.  The EU NATO allies were not recoiling due to the substance of what he said, but rather because he said it publicly.  Keep in mind, Jan Emeryk Rościszewski has been Poland’s Ambassador to France for about a year, and before that he was the Chairman of the Board of PKO Bank Polski, Poland’s largest bank (WEF linkage).

The exact quote: “either Ukraine will defend its independence today, or we will have to enter this conflict. Because our main values, which were the basis of our civilization, and our culture will be threatened. Therefore, we will have no choice but to enter the conflict.”

The immediately triggered retreat by the EU IS HERE.  However, this statement happened on the same day Politico reported: “NATO is racing to arm its Russian borders. Can it find the weapons?”

[…] “Military leaders this spring will submit updated regional defense plans intended to help redefine how the alliance protects its 1 billion citizens. The numbers will be large, with officials floating the idea of up to 300,000 NATO forces needed to help make the new model work. That means lots of coordinating and cajoling. (link)

NATO wants to put 300,000 troops on Russia’s border, and yet they simultaneously pretend not to want an expanded war against Russia.

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Knowing, not predicting – knowing – the Biden economic policies were going to create massive U.S. inflation in the years to follow, in 2021 I pinned a tweet thread to the top of my timeline on the CTH Twitter account that could be used as a reference. [You Can Read Here] Not a single month of statistical data has come in the past two years that was not entirely predictable.  Today’s report from the Bureau of Labor and Statistics (BLS) [DATA HERE] is no different.

Inflation is a measure of the change in a price. It is usually presented in terms of a percentage of change. When inflation starts to lessen, what that means is the rate of the price increase slows down. The price is still going up, but at a slower pace.

February prices overall increased 0.4% for the month, putting the current rate of annual inflation at 6.0%.  Meaning prices (on aggregate) are 6% higher than this exact same time last year.

Meanwhile, wages increased 0.2% for the month, and hours worked dropped 0.3% [DATA]. Wages only rising by half the rate of prices, and hours worked dropping, means the net ‘real wages’ declined, yet again, by 0.4%.

Workers are going backwards.

The very real impact on the working class is getting worse.  The blue collar team, who works for a living and does not take Instagram pictures of their lunches, are getting crushed in the Biden economy.  The divide between the ‘haves’ and the ‘have-nots’ is getting wider.

Put another way, Team MAGA, the entire continuum of normally apolitical working class, is watching the rust growing and feeling the worst part of the Biden economic outcome.  I have often spoken in my immediate circle of influence with the phrase, “financial anxiety is a very real concern the closer you get to the laundromat,” and many people have no idea what that means.

The biggest BS statement of the day goes to CNBC with this sentence:

“Inflation began rising in early 2021 due to a supply-and-demand imbalance. Now, it’s largely fueled by strong demand for labor, economists said.”  (link)

I challenge you to find a more encapsulating pile of horsepucky that represents the financial media era of great pretending.  When I read stuff like this, I begin to think the next great eruption of a violent war is getting even closer, and this war will have nothing to do with nations.

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This is huge in the geopolitical world.  China operated as a broker in the structurally unstable relationship between Iran and Saudi Arabia.

• From the Iranian perspective – With a visibly weak U.S. president, and a strengthening Chinese Chairman Xi Jinping forming a close bond with Saudi Arabia, it makes sense for Iran to move toward diplomatic relations.
• From the Saudi Arabia perspective – With a visibly weak U.S. president, the prior assurances from Washington DC diminish, trust is tenuous, and a stronger hedge-based relationship with Chairman Xi is formed.
• From the Chinese perspective – With a visibly weak U.S. president, and a western alliance intended to destroy itself to fulfill the desires of the WEF climate change and cultural agenda, the opportunity to expand influence is teed up.

It will be intensely interesting to see how Israel positions itself w/ this new dynamic.

BEIRUT — Saudi Arabia and Iran announced an agreement in China on Friday to resume relations more than seven years after severing ties, a major breakthrough in a bitter rivalry that has long divided the Middle East.

The agreement was a result of talks in Beijing that began Monday as part of an initiative by Chinese President Xi Jinping aimed at “developing good neighborly relations” between Iran and Saudi Arabia, the three countries said in a joint statement. The agreement, which was signed by top Iranian security official Ali Shamkhani and Saudi national security adviser Musaed bin Mohammed al-Aiban, said embassies would be reopened within two months.

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