4/20 ANDY HOFFMAN (CryptoGoldCentral.com): My First Oil Article In 15 Years – MUST READ, In Light Of Today’s Historic Price Collapse

For all intents and purposes, I am retired – with 1,000% confidence that Bitcoin will rapidly grow over the next 2-3 years, to become a MAJOR global asset class. After four years of writing about Bitcoin, and a whopping 18 in Precious Metals (which I view as essentially useless in the unfolding Digital Age); I see little need to publish new content, unless I REALLY want to make a point.

Of course, the ramifications of the once-in-a-lifetime pandemic crisis we are facing; made exponentially worse by the potentially horrific monetary crisis that until now, was able to be covered up by money printing, market manipulation, and propaganda; lend to REALLY important opinions, like the one I’m about to share.

Several lifetimes ago; before CGC, bullion, and junior miners; I was a well-known oilfield service analyst – most prominently, at Salomon Smith Barney from 1999-2005. Actually, I was a buyside energy analyst as far back as early 1996 – when the industry was just emerging from the 15 year bear market resulting from the inflationary shocks of the late 1970s OPEC price wars.

Then, the energy outlook could not have been brighter; so, with oil prices between $10 and $20 for the entirety of my ten years in the space, I endlessly wrote of the upcoming, potentially massive energy bull market. Due to decades of economic growth, plus dwindling energy supplies, a price explosion appeared imminent – and ultimately came to fruition, in spades.

However, along with unprecedented economic growth came equally unprecedented growth in the cancerous “financialization” of asset markets, that ultimately put history’s largest, most destructive Ponzi scheme on the brink of destruction…which unwittingly, the Coronavirus pandemic has served to ignite.

Care of more than a decade of unfathomably destructive Central bank policy, in suppressing interest rates; Wall Street chicanery, in enticing all manner of corporations to load up on debt; and oilfield technology advances, like fracking, that enabled far better mining yields; oil supplies have increased more rapidly than demand – masked only by the façade of debt-fueled economic growth, and OPEC’s ability, by lying, cheating, and at times modestly reducing supply, to support oil prices.

In other words, an increasingly precarious supply/demand balance, made worse by the inexorable growth of hybrid and electric vehicle technology – that ultimately, could take over the world.

So, when the Coronavirus took the world by storm, mercilessly attacking weak links in the economy and monetary system, the stage was potentially set for the oil market – by far, the largest commodity market, and one of the world’s largest employers (4% of the global economy) - for a potentially historic crash.

Which occurred, in spades, with WTI crude plunging from $63/bbl in December to $19/bbl at the height of the March market crash…before dead cat bouncing to $29 due to jawboning of an “historic” deal to cut production, featuring OPEC and major non-OPEC producers like Russia, Mexico, and Brazil. Even U.S. oil producers might join, it was propagandized; though anyone who understands the oil industry knows it is IMPOSSIBLE to influence, or enforce, actions on hundreds of independent U.S. oil producers, including majors like Exxon Mobil.

That said, the 10 million bpd production cut they were discussing was, for anyone who understands the oil industry; woefully low relative to what is NEEDED in the current, essentially zero demand environment.

Closer to 20 million bpd is more like it – and the fact they only agreed to 9.7 million bpd (in reality, closer to 4.5 million bpd when you read the “fine print” of the agreement; with ZERO participation from high-cost U.S. producers that cannot afford to cut at all), set the stage for the historic price crash we are seeing today. To that end, oil experts are now saying that in a few weeks, closer to 30 million bpd cuts will now be required, at a time when global oil storage, both onshore and offshore, is ALREADY nearly full.

Just 24 hours after said “historic” deal last week, prices started falling when Saudi went to war with high cost producers by increasing discounts to historic levels…and Friday night, with the price closing at about $19/bbl, the potential for VERY bad things to occur in the oil market was never higher.

That said, this morning’s historic 40% price collapse – to $10.98/bbl as I write, a price last seen in early 1999 – is as shocking, breathtaking, and ominous as anything I’ve seen in my three-decade financial markets career.

Quite frankly, it has the potential to not only destroy what’s left of the global economy (especially if it is not re-opened QUICKLY), but accelerate the collapse of the post-Bretton Woods monetary system…and, equally possibly, ignite military wars as destructive as the monetary ones that have already started.

I’m not going to make any predictions – as frankly, the situation is so shocking, and fluid, anything can happen. However, I’ll leave you by warning of just how horrifying the potential ramifications of such an historically wealth-destroying event can be…and how much more confident I am in Bitcoin’s outlook as a result.