JP Morgan is emphasizing that U.S. energy policy is likely to end up with $150-$200 per barrel oil costs in next year ($10/gal gasoline).  [LINK] Whether that dire prediction comes true is anyone’s guess.  However, consensus review makes nearing $100/barrel costs by the end of this year just as unnerving. ($6/gal gasoline).  That outcome is the centerpiece for why Biden needs the Omicron variant to impact the demand side urgently.

New York – […] “We believe the evolution of coal prices might reflect supply, demand, cost of capital and energy transitioning issues for all fossil fuels, and it would certainly be possible that oil prices will follow the same pattern (inflation adjusted for oil, that would be in a $150-200/bbl range),” wrote a team of JPMorgan Chase & Co. strategists led by Marko Kolanovic. (read more)

This analysis essentially aligns with CTH outlooks and complements what Allianz Group chief economic advisor, Mohamed El-Erian, was saying yesterday [LINK]  The Biden energy policy is specifically to blame for the current price increases across the entire energy sector.

All of Biden energy policy, and all of Biden spending around the Build Back Better agenda, is designed to take us from where we are now into some distant place where fossil fuels are not the energy mechanism; that’s the Green New Deal component of this.  However, there is no policy for their transition – they stopped all current energy policy around oil and coal.

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FULL Analysis Below Video:

Allianz Group chief economic advisor, Mohamed El-Erian, is one of the few financial pundits who understood President Trump’s purposeful economic agenda inside the America First policy {Go Deep and Go Deep}.  However, El-Erian also has to maintain his Wall Street credibility and, like most financial pundits, has to pretend not to know things when the emperor’s new clothes -Biden economics- are being discussed.

El-Erian uses the lingo of the club as he walks carefully in the shadow of his Wall Street allies, and he has to avoid the 800lb gorilla in the room and ignore there are other newly surfacing mechanisms available to the government in their approach to inflation.  In this interview El-Erian does emphasize that inflation is not transitory, it is only going to get worse as long as the Federal Reserve keeps printing money to keep up with the massive and ongoing Democrat spending programs.

When El-Erian says the Fed needs to take their foot off the accelerator, he’s talking about how the Fed policy right now is purchasing debt (Quantative Easing) and printing money to keep up with legislative spending programs.  He knows the Biden administration will not stop this approach, they are committed to the Build Back Better program, and as a consequence El-Erian knows inflation will continue in direct proportion to that ‘demand side‘ activity.  But he cannot call it out directly – he can only say inflation will continue.

All of the Wall Street pundits know the Fed cannot hit the brakes (raise interest rates and stop purchasing debt) or else this entire manipulated economy (even on a global scale) will collapse; as El-Erian says “plunge into a recession.”  It is a tenuous house of cards the current Wall Street crew is betting to remain in place due to the ideological politics (Green New Deal, Build Back Better, etc ).

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Apparently the people behind Joe Biden realize the ridiculous prices at the gas pump are going to be a major political issue for them in the next election. As a result, they have decided to release 50 million barrels of oil from the strategic petroleum reserve (SPR), enough for approximately 3 days of demand. [Announcement Here]

The strategic reserve is intended as an emergency supply in the event of war or national crisis that demands we have some insurance measures to protect ourselves. The SPR is the world’s largest supply of emergency crude oil, and the oil stocks are stored in underground salt caverns at four storage sites in Texas and Louisiana.

The oil in the strategic oil reserve was previously paid for by taxpayers. What Biden is doing right now is giving reserve oil to energy companies who then turn around and refine it into gasoline for taxpayers to purchase. We get to buy it twice, and Biden wants to be thanked for doing it.

The Biden administration is going to lower gas prices for taxpayers by allowing taxpayers to purchase their own oil.  Brilliant!

In related news, the Biden administration also held a call today [LINK] to announce their plan to ease inflation by printing more money.

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The Senate Banking, Housing, & Urban Affairs Committee held a confirmation today for Joe Biden’s communist nominee Saule Omarova to be Comptroller of the Currency.  It really is quite remarkable that Biden would nominate a person who has advocated for government control over all allocation of capital and credit in the U.S. economy.

Ms. Omarova has advocated for government intervention in the allocation of all resources used within the finance and banking system, completely reversing the free market allocation of capital in the economy.   Omarova’s position of federal control is unchanged throughout her life, yet she has attempted to add nuance and denial to a life-long history of working on this process.

Ms. Omarova is the tip of the spear in using finance and banking to implement the regulatory controls needed to support the Green New Deal, where government would intervene and deny capital to private interests who would not be in alignment with leftist energy policy and total economic change via Build Back Better.  Today she was confronted by several senators within the banking committee.  WATCH:

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A very interesting interview with Chris Spear, president and CEO of the American Trucking Association.

During a House Transportation Committee hearing on supply chain issues, CEO Chris Spear shares an internal survey showing that 37% of truck drivers “not only said no, but said hell no” to the Biden vaccine mandates.

To give some perspective of the downstream consequence, the ATA President noted that “if just 3.7 percent, not 37 percent, just 3.7 percent” of the drivers left the industry, there would be over a quarter million vacancies resulting in a “catastrophic” collapse of the U.S. supply chain.  Mr. Spear also shared his opinion the OSHA rule is completely unworkable and unlawful.

The consequences are grave if just 3.7% did not work.  However, if ten times that many, 37 percent of truck drivers, stopped hauling products because of the Biden vaccine requirement, American civic society would collapse within days as panicked citizens took to the streets.  Desperate Americans would be clamoring for scarce products, and the impact on society could not be measured.  WATCH:

As we have continued to point out, a federal vaccine mandate might sound like a good idea on a think tank, academic or white paper policy level of consideration; but on a practical level, wiping out a large percentage of your most productive workforce over a vaccine mandate is unworkable, and might even end the operation of the entire business.

It is important to note the recent NBC poll on this issue amid the outlook of the vaccine mandates.  A majority of the country do not support the vaccine mandates, and worse still, the number of unvaccinated workers is essentially unwavering in the past six weeks {poll data}.  Remember, the number of Americans who willingly quit their jobs increased to 4.3 million in August {link}, and then increased again to 4.4 million in September {link}. People are not f**king around now.

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JoeBama’s National Economic Council Director Brian Deese, the twenty-something central planner in charge of all White House economic policy, tells a curiously skeptical Jake Tapper that things are working swimmingly, exactly according to plan.

According to the Biden-Deese theory on sustainable economic policy, massive spending creates massive inflation; which creates an increased demand for government subsidy to afford basic products; which creates a growing dependency on the government; which creates a need for massive spending.  Wash-Rinse-Repeat.

This is exactly the expanding economic dependency model sold by socialists around the world for generations, which Barack Obama and his Biden administration promise they have now perfected in order to remove the pesky inequities always associated with unbridled capitalism.  Smile everyone, government cheese aplenty….

https://youtu.be/xxtO0xIhw74

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In a rather ironic note, the parseltongue White House explanation is so disconnected from common sense, that furrowed brow’s brain is having an out of body issue, seemingly he is watching himself participate.   The producers shift the camera angles quickly to compensate.

It would appear that somewhere in the recesses of Tapper’s frontal cortex, there remains a glowing ember of the common sense particle.  Unfortunately for the CNN host, the synapse for the common sense particle is pinched between the ‘Smarter than thou tumor‘ and the expanding grey brain matter of moral relativity needed to sit silently and listen to bulls**t.

Within this cognitive conflict, you can visibly see Tapper’s guilt hypothalamus trying to make him uncomfortable… he sighs heavily as the infrequently exercised guilt glands attempt to trigger him to react.  Alas, the party groupthink microchip in his ear warns him to stay quiet.

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Yesterday, data on the wholesale “Producer Prices” was released showing an 8.6 percent increase in prices for final demand products {DATA HERE}.  That is the increase in cost within the system of bringing products to market.

Today, the “Consumer Price” data was released showing a massive 6.2 percent increase in prices {DATA HERE} for goods that are currently available for sale.  The overall rate of inflation is now 6.2% year-over-year.

When you overlay inflation atop wage growth, the Bureau of Labor and Statistics (BLS) report now shows a decrease in “real wages” of 1.6 percent {DATA HERE}, which is the increase in weekly pay minus the additional costs to buy stuff.   The working class is losing ground rapidly.   Things are ugly and they are fixin’ to get uglier.

Before getting to the part where we can explain exactly how much more we can predict to pay for current products in 90 days (yes, that approximation is possible), first lets look at the actual data on the current inflation rate for products we are buying today.  [Table 2] is the easiest reference for category specific review.

Overall, the prices for groceries (food at home) went up 1.1% in October and 5.4% for the year.   However, several products in the supermarket have jumped massively. Beef jumped 1.9% for the month and is 20.1% higher overall.  Bacon went up 2.1% for the month and is now 20.2% higher for the year.  All processed foods increased at a rate about four times higher than fresh unprocessed foods.

Fuel oil went up 12.3% in October and is now 59.1% higher for the year.  Unleaded regular gasoline went up 3.9% in October and is now 51.3% higher for the year. Piped natural gas went up 6.3% for the month and is now 28.1% higher for the year.  Used vehicles are now 26% higher than last year, and new cars went up roughly 10%.  You can scroll down Table-2 to see each category (second and third columns show year and monthly increases).  It’s unnerving to see the scale of inflation while knowing it will get worse.

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This might be somewhat preaching to the choir, but it’s the only way I know to help Treepers prepare their families according to very visible economic signals happening just over the horizon. Back in August, when we discussed the massive inflation that was climbing straight up, I warned everyone to look behind the finished good prices, into the prices of origination and intermediate goods. {Go Deep}

The “producer price index” is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate and Final. The final product inflation rate in July (reported in August) was alarming at 7.8%. However, we warned of much higher flowing into the supply chain.

Today, The Bureau of Labor and Statistics (BLS) released stunning price data for October [DATA Here], showing a dramatic 8.6% price increase in Final Demand products at the wholesale level.  As expected prices are still going up, and there’s no end in sight, because the raw material inflation is still higher than current.

[BLS] “The Producer Price Index for final demand increased 0.6 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.5 percent in September and 0.7 percent in August. (See table A.) On an unadjusted basis, the final demand index rose 8.6 percent for the 12 months ended in October.”  (more)

I modified Table A (final demand product pricing) taking out some of the noise to make it a little easier to see the big picture of what is happening.

When you see the wholesale level of prices almost double the increase in consumer level inflation rate, you can predict that consumer prices will likely go even higher.  Future finished goods at a retail level will carry the current wholesale price increase.

Stuff costs a lot now… and because the inbound stuff to make the finished goods is still climbing in price…. stuff is about to cost even more.   You can see this in the inflation rate of intermediate goods which I have highlighted below.

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A comprehensively incompetent U.S. Energy Secretary, Jennifer Granholm, has the audacity to say that Biden’s administration has no responsibility for gas prices likely to reach $4/gal, and Americans this year are almost certain to pay historic amounts for home heating oil and natural gas.

Everything in this soundbite from her interview with CNN is stunningly false, manipulative and misleading.   The U.S. has an abundant amount of energy resources, likely more oil than all other OPEC countries combined in Alaska alone.   The issue is a current administration that refuses to extract oil and natural gas because they are purposefully and intentionally intent on destroying the U.S. economy under the guise of climate change.

Granholm admits that gasoline is likely to go beyond $4/gal in the national average, and home heating costs are almost certain to crush Americans this year.  Infuriating to see such willful stupidity go unchallenged.  WATCH:

So what can a U.S. President and administration specifically do?

We have abundant U.S. energy resources.  Quite literally the strongest in the entire world.

• Permit the use of preexisting approved leases in ANWAR (Alaska) to put more volume into the Alaskan oil pipeline that is severely underutilized.
• Finish the Dakota access pipeline.
• Reapprove the preexisting energy leases in New Mexico, Arizona, NE Atlantic and Gulf of Mexico.
• Retract the stoppage of the Keystone pipeline to permit efficient oil transport shipments from Canada.
• Stop blocking the expansion of coastal oil refineries in Texas, Louisiana and Alabama (regulatory issue), as well as Northwest, Northeast and Southeast Seaboard.
• Continue to develop natural gas as a clean burning fuel.
• Drive Liquefied Natural Gas (LNG) as an export.

None of this requires any approval from OPEC.  Strategically, the all of the above approach enhances U.S. national security and diminishes the influence of Russia, China and Iran.  Within six months of the above, gasoline will plummet.

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Energy Secretary Jennifer Granholm was asked what the Biden administration plan was to increase U.S. oil production.  Her response is exactly what you might believe it would be from a thoroughly incompetent ideological administration.  WATCH:

So what can a U.S. President and administration specifically do?

We have abundant U.S. energy resources.  Quite literally the strongest in the entire world.

• Permit the use of preexisting approved leases in ANWAR (Alaska) to put more volume into the Alaskan oil pipeline that is severely underutilized.
• Finish the Dakota access pipeline.
• Reapprove the preexisting energy leases in New Mexico, Arizona, NE Atlantic and Gulf of Mexico.
• Retract the stoppage of the Keystone pipeline to permit efficient oil transport shipments from Canada.
• Stop blocking the expansion of coastal oil refineries in Texas, Louisiana and Alabama (regulatory issue), as well as Northwest, Northeast and Southeast Seaboard.
• Continue to develop natural gas as a clean burning fuel.
• Drive Liquefied Natural Gas (LNG) as an export.

None of this requires any approval from OPEC.  Strategically, the all of the above approach enhances U.S. national security and diminishes the influence of Russia, China and Iran.  Within six months of the above, gasoline will plummet

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