Submitted by Nick Cunningham via OilPrice.com,

Saudi Arabia surprised the world by helping to engineer an unexpectedly strong agreement from OPEC members to cut production by 1.2 million barrels per day, followed by additional cuts from non-OPEC members. While the two agreements incorporate cuts from a wide range of oil producers, Saudi Arabia will do much of the heavy lifting, cutting nearly 500,000 barrels per day and even promising to go further than that should the markets warrant steeper reductions.

Depending on one’s perspective, Saudi Arabia demonstrated its diplomatic prowess and made OPEC relevant again, succeeding in talking up oil prices without sacrificing much. After all, Saudi Arabia often lowers production in winter months. Other analysts look at it a different way – Riyadh was actually pretty desperate for higher oil prices, given the toll that the two-year bust has taken on the country’s economy. That led Saudi Arabia to shoulder most of the burden of adjustment, achieving only small concessions from other OPEC members, most notably Iran. Riyadh was the big loser of the deal, the thinking goes, but ultimately had no choice as the government needed higher oil prices.

There are arguments to made for both sides, but then there is a third possibility: Saudi Arabia was motivated to pullback because it was actually leaning on its oilfields too hard this year when it pushed output up to 10.7 million barrels per day, an output level that might have strained the reservoirs of some of its largest fields. Producing too aggressively can ultimately damage the long-term recovery of oil reserves. Reuters reports in an exclusive report that Saudi Aramco could have been pushing its oil fields to the limit this year, and had little choice to but to climb down from record high output levels.

Saudi Arabia has long maintained that it could ratchet production up to 12 mb/d or more if it wanted to, but such a massive rate of production has never actually been proven or even tested. Reuters raises the possibility that Saudi Arabia might not actually have the ability to go that high. A source told the news organization that Saudi Aramco might only be able to produce at 11.4 mb/d, and going beyond that level would require billions of dollars in new investment in several years of development.

But making the enormous investments needed to take its production capacity up to 12 mb/d at a time when government coffers are depleting led Saudi officials to the conclusion that it needed to take a breather, sources told Reuters. With its oilfields feeling the strain, Saudi Arabia saw an urgent need to dial back output a bit, which made it particularly determined to strike a deal with fellow OPEC members. The prospect of higher oil prices ultimately made the promised production cuts seem like much less of a sacrifice.

The question surrounding how much oil Saudi Arabia can ultimately produce if it completely opened the taps is not an academic one. Saudi Arabia is the one country in the world that is thought to have a substantial volume of capacity sitting on the sidelines for the purpose of being called upon when oil markets need additional supply in a pinch. Every other country and company pretty much produces flat out save for a few small exceptions. This “spare capacity” is a major buffer for oil price volatility, as the markets rest assured that Saudi Arabia will plug any supply deficit from an unforeseen outage such as natural disaster (Hurricane Katrina) or conflict (war in Iraq).

But Saudi Arabia is secretive about the details of its industry and capabilities. The operating assumption that Saudi Arabia can ultimately produce 12 mb/d is the basis for calculating OPEC’s (and thus, most of the world’s) spare capacity.

Riyadh’s strategy of abandoning price stability and going for market share in 2014 led to a ramp up in production. Output hit a record this year at 10.7 mb/d. That necessarily led to a drawdown in spare capacity, dropping near 1 mb/d, the lowest level in years. Historically, oil prices have spiked when spare capacity runs low. Since 2014, however, the world has been awash in oil, and rising inventories acted as a second source of spare capacity, dampening any concerns about the effects of an unexpected outage.

(Click to enlarge)

However, the oil markets could be in a tighter situation than many have expected if Saudi Arabia can’t actually produce at 12 mb/d. Oil consultancy PIRA says that the kingdom could produce 10.5 mb/d on short notice, and anything higher would damage oil fields. "Saudi Arabia could produce more but it would likely come at the expense of optimal reservoir practices. They could certainly bring on new fields but this is a lengthy process (years) and expensive as well," PIRA says, according to Reuters. "So far the kingdom is not adding any significant new producing capacity based on project announcements and rig activity but rather replacing the aforementioned 4 to 6 percent annual decline rate."

Again, since oil inventories are so high, it is not as if the world is in danger of a shortage if an outage occurs. Storage levels are so high that they will take time to come down. Nevertheless, if Saudi Arabia can produce a lot less oil than previously thought, that adds to concerns about the security of supply over the longer-term.

We will find out a bit more about Saudi Arabia’s oil secrets when it releases financial data related to Saudi Aramco in anticipation of its partial IPO in 2018.

via http://ift.tt/2gTiF0k Tyler Durden

Rogue elements within the Shadow Government and most notably the CIA, NSA, and the left coast billionaire class have launched an anti-Trump campaign in the hail mary long shot that they can disrupt the establishment in the final days when they still hold the keys to the kingdom with the intent of malice to incite a coup, civil war, or an upset in the electoral college system.  One of the main information manipulation tactics they are using we can paraphrase as “1. Confuse, 2. Plant false facts, and 3. Reinforce the illusion” needs an underlying topic that is shrouded in mystery from an American perspective, and there is no better topic than Russia.  It’s because the CIA already spent billions of dollars during the cold war convincing a generation of baby boomers that Russians had ‘missile bases on the dark side of the moon’ and other such nonsense.  But as we explain in our best selling book Splitting Pennies – the world doesn’t work the way most people are led to believe.  

We can STOP the LIES being promulgated in the mainstream news about RUSSIA which is being used to CONFUSE AND MANIPULATE public opinion, in the pathetic petty attempt to create CONSENSUS TRANCE that can have any number of outcomes, keeping TRUMP out of the White House.  STOP this pathetic campaign by understanding RUSSIA a little better!  Spread the FACTS!

Here are a few facts to stir your brain and hopefully, break the chain of neuro linguistic programming:

1. Russia uses a public central bank system, whereby the central bank is owned by the government.  In turn, Russia’s largest bank, Sberbank, is owned by the central bank by at least 51%, making Russia’s banking system state owned and operated.  Although Russia is not a government ‘of the people, by the people’ – they own their banking system!  As opposed to the US system, which is owned by Elite rich rober baron families and banks.

2. Russia has one of the fastest growing middle classes of any country on Earth.  

3. There are more than 3 Million Russians living in the United States of America.

4. The Bolshevik revolution, was bankrolled by New York bankers, many of whom were Jewish.

5. There were at least 10x more people killed in Russia by Stalin than Hitler in Germany, maybe 20x more.  The fact is that we’ll never really know the real numbers.

6. Russia is effectively a third world country with Nuclear weapons.

7. Russia is one of few countries that have engaged in what can nearly be called ‘ethnic cleansing’ or the deportation of non-Russians back to their country.  Russia is not a melting pot, like the Soviet Union tried to be.  It is a homogeneous land of mostly White Christians.

8. Throughout the period of the Soviet Union, many Americans did business with the regime, most notably Armand Hammer.

9. While European colonists were establishing the 13 colonies, Russia was establishing Alaska.

10. George W Bush and Vladimir Putin were practically best friends, just checkout these 25 photos about their “Bromance”.  (why doesn’t the CIA call George Bush about his ‘close connection’ with Putin?  hmmm….)

11. In 1990 during a food crisis, Mikhail Gorbachev and George H. W. Bush signed a trade agreement about delivery of frozen chicken leg quarters to the USSR.  Due to the fact that in many markets these were the only chicken available, they dubbed them “Bush Legs.”  Many locals believed that it was some sort of CIA plot to genetically manipulate the population as the chickens were 2 – 4 times the size of chickens in Russia.  

Why doesn’t the CIA want you to know this?  Because Russia is an easy black box enemy.  Since people don’t know what Russia REALLY is, unless you have intimate knowledge of the place – it’s easy to lie to naïve TV watchers, and paint a picture of great villains and evil people who drink Vodka and wear fur hats.  Russia is a strange place, maybe the strangest in the world.  But everything being promulgated about Russia in the mainstream media is completely manufactured from Langley (or wherever they are doing it now).

Don’t believe us – read some of these books and articles:

Wall Street and the Bolshevik Revolution.  

Armand Hammer: The Untold Story

A People’s History of the United States

Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich

To learn how the global financial system works, checkout Fortress Capital Trading Academy

via http://ift.tt/2gJhw83 globalintelhub

Hold your real assets outside of the banking system in one of many private international facilities  –>    http://ift.tt/2cyFwvQ;

 

 

 

 

The Great Interest Rate Contradiction

Written by Jeff Nielson (CLICK HERE FOR ORIGINAL)

 

 

 

It is both one of the greatest contradictions and greatest frauds in the entire realm of markets: the U.S. interest rate contradiction. The facts are these. At the end of 2008; the Federal Reserve (with other Western central banks in tow) embarked upon the most-extreme monetary policies in Western monetary history: “quantitative easing” (monetizing debt), and 0% interest rates (i.e. free money).

 

A so-called 0% interest rate is a prima facie fraud. By definition; an interest rate is a positive number. It is the price of capital. The price for any good which has value must be greater than zero, in any legitimate transaction. To pay a price of $0 (or less) for something of value is an obvious fraud. It is upon this fraud that the U.S. has based its monetary system for the past eight years, mitigated ever so slightly by two, token rate increases from the Fed, in recent years.

 

In 2008; when the Federal Reserve embarked upon its legal fraud, it (along with the other central banks) promised to normalize interest rates, immediately in 2009. It was the “Exit Strategy” of which Fed Chairman B.S. Bernanke boasted at the time. There was no Exit Strategy, and after a few years of lip service, the phrase was abandoned altogether by Bernanke and the rest of the central bank liars. The same central bankers who had solemnly promised to “never copy Japan” were deliberately copying Japan.

 

However, starting in 2011, something strange began happening in markets. A divergence appeared which has persisted to this day. During 2009, 2010, and the early part of 2011; equity markets (and particularly U.S. markets) were rising, and so were precious metals markets – as this central bank insanity equated to the most-bullish fundamentals in the history of precious metals markets.

 

Bernanke and the rest of the Fed liars regularly talked about raising interest rates, something which is (supposedly) bearish for both equities markets and precious metals markets. The reason why higher interest rates are bearish for equities is simple: it raises the price of capital (i.e. credit), which is bearish for equities markets in several respects. The reason why higher interest rates are supposedly bearish for precious metals is more mythology than fact, but let’s put that issue aside.

 

The Fed talked about raising interest rates, over and over, but it never did anything, and so equities markets and precious metals markets continued to rise. Indeed, while the devious Bernanke was talking “Exit Strategy” out of one side of his mouth, he was boasting “wealth effect” out the other side – pointing out how his extravagant money-printing was pumping up U.S. markets.

 

Suddenly, in the spring of 2011, the Great Interest Rate Contradiction began. Suddenly, precious metals prices began to fall. Why? “Because the Federal Reserve was about to raise interest rates.” It was a mantra preached by the Corporate media every day, starting in the spring of 2011. It is a mantra which the Corporate media continued to preach every day. And precious metals prices fell, day after day, week after week, month after month.

 

From the spring of 2011 to the end of 2015; the price of silver fell from a high of $49/oz (USD) to a low of $13/oz, representing a decline of almost 75%. The price of silver fell by 75% because the Fed “was going to raise interest rates”, while during that time there was only one, token increase. The price of silver fell, every day, just on talk that the Fed would raise rates. Yet after each Fed meeting when it failed to raise interest rates, the price only rose for one day. The silver market moved every day on talk, it only moved for only one day on actions. Totally perverse.

 

The situation was similar in the gold market, except not as extreme. The price of gold fell from a high of over $1900/oz (USD) to a low of under $1,100/oz – a greater than 40% plunge. The price of gold fell every on Fed talk. It rose for only one day on its actions (i.e. the failure to act). Then for a brief period of time starting at the beginning of 2016, the “Fed hex” miraculously vanished.

 

For the nearly six months which regular readers now know as the Fake Rally, the same talk that had caused precious metals prices to fall, relentlessly, week after week, ceased to have any effect on these markets. Then, just like some crooked banker flipping some invisible switch, the talk of the Federal Reserve raising interest rates again began sending precious metals prices lower, every day.

 

Indeed, one of the primary reasons why readers were warned that the Fake Rally had ended was that the “Fed hex” was back. Once again, all it takes, any time, any day to send precious metals prices lower is for any of the two-faced Fed-heads to mouth the words “raise interest rates”.

 

What have we seen, over the past several weeks? We’ve seen gold and silver prices falling on the talk that finally, this time, the Fed was actually going to raise interest rates – for the second time in eight years. To say that precious metals markets had already “priced in” this rate-hike would be one of the greatest understatements in the history of the English language.

 

Yet what have we seen since the Fed raised rates? Gold and silver prices have continued to fall. Why? Just ask the Corporate media. They have fallen, for several days, because the Fed raised interest rates. Despite prices falling week after week, month after month, year after year, on mere talk of raising interest rates; despite prices rising for only one day each time the Fed failed to raise rates; prices are supposed to continue to fall (we’re told), day after day, to “price in” the rate increase. Totally perverse. But it gets worse.

 

What have we seen in U.S. equity markets since the spring of 2011? Did they turn lower on mere talk of raising U.S. interest rates? No. They continued higher in 2011. They continued higher in 2012. They continued higher in 2013. They continued higher in 2014. They continued higher in 2015. They continued higher in 2016.

 

The same “Fed hex” that managed to torpedo precious metals markets day after day, week after week, month after month, year after year, has had absolutely no effect at all on U.S. equity markets. They rose when the Fed talked about raising rates. They rose even more strongly each time it failed to raise rates – and for several days afterwards.

 

Yet after eight years of these U.S. bubble markets going higher and higher, when the Federal Reserve finally announced its second, token increase, the U.S. markets paused for only one day – and then have immediately began bubbling higher again. Indeed, we have even gotten the totally absurd proclamation from the Corporate media that higher U.S. interest rates are no longer bad for U.S. equities – just gold and silver. Totally perverse.

 

Precious metals markets go down, for 5+ years, every day, on talk by the Fed liars of raising interest rates. Then they fall even harder for several days more, to “price in” any token rate increase which actually occurs.

 

U.S. equities markets go up, for 8 years, every day, despite talk by the Fed liars of raising interest rates. Then when a token rate increase actually occurs, they fall for one day. Given the “New Math” from the Corporate media, maybe U.S. equities markets will actually go up the next time a token Fed rate increase occurs?

 

Much more likely, however, is that this latest media and market perversity is simply the last gasp of euphoric insanity before the One Bank pops the bubbles which it has worked so hard to inflate – so it can shear the Sheep on the way down. Then start a new bubble-and-crash cycle.

 

For precious metals investors, you were warned. The Fake Rally wouldn’t last, prices would turn lower before gold hit $1,500, and the downturn would become part of a general “crash”, whenever the banking crime syndicate chose to detonate these bubble markets. Prices have turned lower, the bankers have ensured that precious metals “charts” look dreadful, and these U.S. bubble markets could not be more-ripe for detonation.

 

However, as has been explained previously, those readers hoping/waiting to “load up” on gold or silver at crash prices will almost certainly be disappointed. Anecdotal evidence that these markets have gotten increasingly tight surfaces often, from a multitude of sites and sources. Notably both the U.S. Mint and Royal Canadian Mint have been rationing the supply of silver to their customers.

 

During the Crash of ’08, when silver hit its $8/oz low, there was no silver to be had – except for the largest bars: 100 ounces and up. During the Crash of ’16 (’17?), we can only expect the situation to be significantly worse, after eight more years of supply deficits in the silver market.

 

To date, we have not seen similar signs of ultimate stress in the supply of gold. However, that situation could change in a heartbeat, at any time of general panic and rock-bottom prices.

 

Assume there will be little if any bullion available when the Next Crash ensues. In 2011, or even 2012; if we had been told we would be able to buy silver at $16/oz (USD) and buy gold at $1,130/oz (USD), then even with our Harper-debauched Canadian dollars, we would have leapt at the opportunity.

 

Now is certainly not the time for precious metals investors to get greedy. Assume that the “bottom” is here. For those who wish to buy; buy now. Because when the phony lows occur in the bankers’ ultra-fraudulent paper markets, it’s almost certain that all you will be able to buy there is paper.

 

 

 

Please email with any questions about this article or precious metals HERE

 

 

 

 

The Great Interest Rate Contradiction

Written by Jeff Nielson (CLICK HERE FOR ORIGINAL)

via http://ift.tt/2gSA7n8 Sprott Money

As Obama gets set to announce retaliation efforts against the Russian government for “hacking” the 2016 election, Julian Assange has come forward, once again, to confirm that his source is not the Russians.  Appearing on the Sean Hannity radio show, Assange had the following to say:

Assange:  “Our source is not the Russian government.”

 

Hannity:  “Let me be clear, Russia did not give you the Podesta documents or anything from the DNC?“

 

Assange:  “That’s correct.”

JULIAN ASSANGE: Our source is not the Russian government (via #Hannity) http://pic.twitter.com/ySTEg8HBqa

— FOX & friends (@foxandfriends) December 16, 2016

 

Meanwhile, even James Clapper, the Director of National Intelligence who oversees the 17 intelligence agencies that Hillary loved to quote during the campaign, confirmed, after the election, that he had no “good insight” into where WikiLeaks received they’re information.

James Clapper, Director of National Intelligence (11/17/16):  “As far as the WikiLeaks connection, the evidence there is not as strong and we don’t have good insight into the sequencing of the releases or when the data may have been provided.  We don’t have as good insight into that.”

So, just to summarize where we are.  WikiLeaks, the organization behind both the DNC and Podesta leaks, has confirmed repeatedly that its source was not the Russian government.  James Clapper, the head of Hillary’s 17 intelligence agencies, has confirmed that he has no “good insight” into where WikiLeaks got their information.  But the Obama administration, utilizing the full might of the corrupt mainstream media, is about to “retaliate” against the Russian government, without a shred of credible evidence, as the mainstream media continues to spin a dangerous narrative based on “anonymous” sources at the CIA.  Does that about sum it up? 

Here is the full interview with Assange:

via http://ift.tt/2hCq0lU Tyler Durden

As headlines about China seizing a US underwater drone make their way to the mainstream, the USDollar is tumbling (Yen is well bid) and stocks are sliding rapidly…

The Dollar Index is tumbing…

 

And Stocks are getting hit…

 

This has sent all but Small Caps into the red post-Fed (in fact to the post-Fed lows)…

via http://ift.tt/2hOWVnI Tyler Durden

The escalating, so far mostly verbal conflict with China may have just heated up following a Reuters reports that China has seized an unmanned, underwater US navy vehicle inside off international water in  South China Sea, and that the US has issued a formal statement demanding the return of the vehicle.

• CHINA’S NAVY HAS SEIZED AN UNMANNNED, UNDERWATER U.S. NAVY VEHICLE COLLECTING SCIENTIFIC DATA IN INTERNATIONAL WATERS OF SOUTH CHINA SEA
• UNITED STATES HAS ISSUED A FORMAL DEMARCHE TO CHINA, DEMANDING THE RETURN OF UNDERWATER VEHICLE -U.S. OFFICIAL TELLS REUTERS

BREAKING: China’s navy has seized an unmanned, underwater U.S. Navy vehicle in international waters of South China Sea.

— Reuters Top News (@Reuters) December 16, 2016

This “seizure” takes place one day after China’s influential state-run tabloid, the Global Times, called for a plan to take Taiwan by force and make swift preparations for a military incursion. The article urged China to rebalance its stance towards Taiwan to “make the use of force as a main option” and carefully prepare for possible moves toward independence.

It also follows a series of warnings to the Trump administration by Chinese diplomats, in which they cautioned that China will not allow the “One China” policy to be used as a bargaining chip, something Trump hinted he was willing to do in a Fox News interview last Sunday.

Developing story.

via http://ift.tt/2hCgjEf Tyler Durden

Remember when The NYT reported that its ad hoc campaign to boost revenue by selling subscriptions in response to the vicious back and forth with Donald Trump, was said to be a smashing success? Perhaps it was subscriptions for the crossword puzzle because it appears the monetary success was not smashing enough, and according to a just released note from executives Arthur Sulzberger and Mark Thompson, the “alt-left” newspaper will vacate at least eight floors in its iconic building, allowing it to “generate significant rental income” because “frankly, too expensive to occupy this many floors when we don’t truly need them.”

Remember: when the newspaper business model no longer works, one can just pivot into a REIT.

The remaining staff will be consolidated on the remaining, redesigned floors in a “more dynamic, modern and open workplace, one that is better suited to the moment.”

Furthermore, the NYT publisher and CEO will lose their corner offices, which they call a “vestige from a different era” and will “introduce more team rooms and common spaces.”

Full memo below:

Dear Colleagues,

 

When we moved into our new building in 2007, we saw it as a modern headquarters for a modern New York Times. We still feel that way.

 

But as Mark mentioned in the State of The Times last month, after a good deal of consideration, we have determined that the way that we use our headquarters building needs to evolve to better match the changes you and your colleagues have been driving across every part of the company.

 

The current way we have configured our office makes us slower and less collaborative. It is also, frankly, too expensive to occupy this many floors when we don’t truly need them.

 

We’ve made the decision to consolidate our footprint across the building to create a more dynamic, modern and open workplace, one that is better suited to the moment. We’re planning significant investments in a redesign of our existing space in order to facilitate more cross-departmental collaboration.

 

We expect a substantial financial benefit as well. All told, we will vacate at least eight floors, allowing us to generate significant rental income.

 

We have engaged Gensler, an architecture and interior design firm, to help us redesign our workplace and beginning early next year, work will begin on select floors below 14. By the end of next year, we expect to have consolidated our occupancy to that side of the building. We will keep the cafeteria and the conference rooms on 15.

 

We have already seen that changing office layouts can lead to good results. Some of the most creative wings of the company — the Beta team, the Graphics Department and some of our technology teams have changed their floor plans to help improve the way they work.

 

The coming redesign will introduce more team rooms and common spaces. And, we will do away with big corner offices, like the ones you see on the 16th and 17th floors, including, yes, the publisher and CEO’s offices. We don’t need to preserve those vestiges from a different era, so we won’t.

 

In the end, these changes will impact every employee at 620 Eighth Ave. In the near term, we will have to move about 400 employees out of the building to nearby office space while the first phase of work is completed. We expect that group, which includes parts of marketing, technology, the newsroom, news services, corporate finance and print products and services pre-press operations, to move in the first quarter and return by the end of 2017. Your manager will notify you if your position is affected by this temporary move. We understand and appreciate the disruption this will inevitably cause and we will do everything in our power to mitigate it.

 

Representatives from across the company are serving on a steering committee to help us plan these changes. They will solicit input from everyone interested in providing it and we’re committed to  keeping you fully informed as the project plays out.

 

We will have more details soon.

 

Thank you.
Arthur and Mark

Perhaps Facebook’s “fact-checkers” can move into the soon to be vacant space…

via http://ift.tt/2gJbtk1 Tyler Durden

Fool me once…

For the umpteenth time this year, Facebook has come clean with an error in its advertising metrics. In November, Facebook said that after discovering several mistakes in its reporting methods, it would be more transparent about errors in the future. And so, as Bloomberg reports,

Facebook said it found another problem with metrics used by publishers and advertisers to gauge the reach of content posted on the world’s largest social network.

 

Facebook said in a blog post that it had been under-reporting traffic from publishers that participate in the company’s Instant Articles system. The mishap, which Facebook said was discovered by comScore, was traced to a recent software update. It resulted in some traffic not being counted properly from iPhone users from Sept. 20 to Nov. 30.

 

“We have fixed the issue and are working with comScore to produce updated estimates for the relevant time periods for the small group of partners affected,” Facebook said in the post.

 

Facebook has been trying to lure publishers into the Instant Articles program. It lets media companies publish content on the social network directly instead linking back to their own websites. Articles load faster for users, but some publishers have raised questions about ceding control to Facebook and diminishing their relationship with readers.

 

The disclosure is the latest in a string of problems Facebook has disclosed about metrics critical to business decisions made by advertisers and publishers working with the Menlo Park, California-based company.

The result, for now, is selling pressure…

 

 

via http://ift.tt/2gSXTxG Tyler Durden