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Last August, Saudi Arabia and Russia signed a military co-operation agreement. What does that tell you? The Petrodollar is dead? Maybe.
Around the same time, Palantir made the News media because it used US$50m in shareholder funds to buy Gold. Palantir Technologies is a public American software company that specializes in big data analytics. It does a lot of work for US Intelligence organisations. You would think Palantir would be big on blockchain technology and in turn cryptocurrencies.
Then last December, India and Russia sign something like 48 trade agreements, including bypassing the US$ for transactions.
Back in 2019, the US Fed had to step in (coincidentally just before the outbreak of COVID), and inflate the reverse repo market. Apparently US Banks had lost faith in placing funds elsewhere, due to counterparty risk. It hit US$1.7t.The US Fed had to prevent rates going negative because they are the world's reserve currency for financial settlements. Negative rates would've sent a message that the US$ is rubbish. Is that the message the Euro sends? I understand the Euro reverse repo market is over E10t.
The e-Reminbi goes mainstream soon. The CryptoRuble not far behind (both defacto backed by Gold) and now the USA talking of a CBDC, Fedcoin in their last FOMC minutes. Will DeFi be exposed as just a pyramid scheme? Are the main beneficiaries of DeFi, ransom hackers? Why would anyone want to support them?
A lot of people have been under the mistaken belief that Bitcoin is a hedge against inflation. Recent market activity has demonstrated that Bitcoin and other Cryptos just fall into the Tech Growth stock category.
The BRIC nations love Gold. There has been growing reticence to fiat currencies and the US$ as the world's reserve currency. Especially given the control it delivers to the USA. DeFi must fall flat and is. Central Banks are buying Gold. Gold is the canary in the Coal mine and US/European Banks have been "influencing" the POG but for how much longer?
The US Fed said last year inflation is transitory. Then reversed sentiment. They signalled the Genie was out of the bottle and they need to act. Now many argue inflation is peaking and will subside. Not if the POO explodes.
The co-ordinated release of Strategic Oil Reserves by the USA, China and Japan, sent a flashing light late last year. ESG requirements cripple domestic output. The USA produced 13m barrels of Oil per day (and self sufficiency) under the previous Administration ... but down to 11m under Biden.
Now the POO is back over US$80. Russia and OPEC would not be happy about others trying to interfere in their POO. What is the outlook for the POO?. The big run on the POG in the 70s was the oil shock/energy crisis, when the POO got out of control.
Volker did not have US$30t in debt to worry about. The US fed cannot take the same action today.
So what is the outlook for the POO ... and in turn inflation ... and in turn the POG? Palantir was the big tip of 2021. Perhaps the big tip of 2022 is Pioneer Natural Resources:
https://www.zerohedge.com/markets/prepping-liftoff-permians-largest-oil-producer-shells-out-328-million-peel-its-hedges
