Bitcoin - Week 49 - Cointribune

Bitcoin is the antidote to cashless society and inflation. Inflation should be further hardened against the Russian oil embargo.

15% inflation over two years

Inflation was at least 10% in November in the euro area. It was already 5% during the same period a year ago. In other words, prices have increased by 15.5% over two years.

Results over one year on the French food product basket according to NielsenIQ:

Frozen meat: +29%
Toilet paper: +20%
Pasta: +20%
Oil: +20%
Butter: +17%
Eggs: +16%
Canned vegetables: +15%
Animal feed: +14%
Rice: +14%

At a rate of 10% per year, prices will increase by 100% within six years. We will then buy half as many things for the same amount of euros. In other words, the reduction in purchasing power will be 50% if wages stagnate in the meantime.

Economy Minister Bruno Le Maire has been promising us for six months that inflation will decrease “in a few weeks or a few months”. We miss you. And the worst may be yet to come.

The reason is that the G7 and the EU have just announced an embargo on Russian oil sold above the price of 60 dollars a barrel.

Not much success at the moment since the sale of Russian oil transported through the Far Eastern port of Kozmino for 79 dollars a barrel in Asia on Monday. That’s almost a third more than the ceiling price.

The Western strategy is to try to deprive Russia of the tankers it needs to transport its oil. The G7 countries are forced by their insurance companies to no longer insure the owners of ships carrying Russian oil as long as the latter is sold for more than 60 dollars per barrel.

Therefore Moscow recently decided to buy more than a hundred tankers to bypass the G7 system.

Lake is the world’s largest oil exporter

It is difficult to say whether this fleet will be enough. Meanwhile, a tanker traffic jam has been created in Turkish waters. The FT reports that around twenty tankers were already blocked in front of the Bosphorus Strait on Monday.

NATO member Turkey has asked all tankers to provide letters from the International Group of P&I Clubs, which represents 13 insurers covering almost 90% of global shipping. The P&I club said on Monday that Turkey’s demands were going “much longer” general knowledge usually required.

In short, we may be facing yet another disruption in the global supply chain. And this time, it’s the lifeblood of the economy: oil, on which 95% of global transport depends. Will we soon have a shortage of gas stations?

Russia is indeed the third largest oil producer in the world, behind the United States and Saudi Arabia. In January 2022, Russia produced 11.3 million barrels per day, including 10 million barrels of crude oil.

More importantly, Russia is the largest exporter of gasoline and the second largest exporter of crude oil behind Saudi Arabia. According to the IEA, Russia exported 7.8 mb/di in December 2021. That’s almost 9% of world production.

Before the start of the war in Ukraine, 34% of the EU’s oil imports came from Russia. As much oil as the old continent will be bought elsewhere, more expensive.

The $60 cap is intended to limit Russia’s income while ensuring that Moscow continues to supply the world market. However, Russia has no intention of playing well.

Not

“The Russian economy can fully meet the needs and requirements of the special military operation”Kremlin spokesman Dmitry Peskov said. “Russia will not sell its oil to countries that impose this limit”he added.

In short, here we are in the presence of an electricity crisis due to a lack of investment in nuclear reactors of the third and fourth generation. Thank you Francois Hollande. Thank you Macron.

We are also facing a gas crisis. Know that Qatar will not be able to supply a single drop of LNG before the end of 2026.

And finally oil crisis. I knew that OPEC was on Russia’s side by refusing to increase its production. Not to mention the fact that conventional oil production has been falling steadily since 2007…

Saudi Arabia and the United Arab Emirates resisted US pressure and urged “choose sides”. Uncle Sam wants Ryiad not to play into the hands of China and Russia. Except that the first and foremost oil importer is Saudi Arabia and the second is part of the OPEC+ cartel…

Saudi Arabia will also receive Chinese President Xi Jinping from December 7 to 9. Numerous agreements should be signed with the Gulf countries regarding it. Energy, security and multiple investments will be on the table.

The next few days are likely to be eventful for the oil market. Geopolitical tectonic plates are shifting and supply chains that have existed for decades will be disrupted.

Since energy is at the heart of productivity, its excess demand will lead to a further generalized boost to inflation. In Turkey, inflation has already reached 84% in the last year…

How long do we have before the great hyperinflationary reset hits Europe too?

The coming years will be painful. Those who receive bitcoin today cannot thank themselves enough. Small addresses (<0.1BTC) did not accumulate as much as in the last month. Good luck!

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