The Duopoly Just Put Taxpayers on the Hook for Trillions in Oil Derivatives
By Ellen Brown. The sudden dramatic collapse in the price of oil appears to be an act of geopolitical warfare against Russia. The result could be trillions of dollars in oil derivatives losses; and the FDIC could be liable, following repeal of key portions of the Dodd-Frank Act last weekend. . .
[T]he shocking $50 drop in the price of oil was not due merely to the forces of supply and demand, which are predictable and can be hedged against. According to an article by Larry Elliott in the UK Guardian titled “Stakes Are High as US Plays the Oil Card Against Iran and Russia,” the unanticipated drop was an act of geopolitical warfare administered by the Saudis. . .
If the plan was to break the ruble, it worked. The ruble has dropped by more than 60 percent against the dollar since January. But it came at a cost: not only are U.S. oil producers hurt, but the derivatives banks will get killed if oil prices don’t go back up soon.
At least they would have been killed before the bailout ban was lifted. Now, it seems, that burden could fall on depositors and taxpayers [since the FDIC will now cover derivative losses due to the repeal of parts of Dodd-Frank last weekend]. Did the Obama administration make a deal with the big derivatives banks to save them from Kerry’s clandestine economic warfare at taxpayer expense?
Whatever happened behind closed doors, we the people could again be stuck with the tab. We will continue to be at the mercy of the biggest banks until depository banking is separated from speculative investment banking. Reinstating the Glass-Steagall Act is supported not only by Elizabeth Warren and others on the left but by prominent voices such as David Stockman’s on the right. (Read more from this story HERE)
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Russian Economy Shrinking
By Nataliya Vasilyeva. MOSCOW (AP) — The Russian currency extended its losses on Monday after a report showed the economy has started shrinking in annual terms for the first time since 2009 as the country is buffeted by falling oil prices and Western sanctions.
Meanwhile, the government, which has been scrambling to support the ruble and the economy, announced fresh steps to keep the banks afloat.
The ruble has been one of the world’s worst performing currencies this year and was down another 5 percent on Monday, trading at 56 rubles per dollar in early afternoon in Moscow, wiping off some of the gains it made last week.
The fall came as the Economic Development Ministry issued a report showing the economy shrank by 0.5 percent in November compared with a year earlier. The ministry attributed the year-on-year decline in the economy, Russia’s first in five years, to a sharp drop in manufacturing and investment. (Read more from this story HERE)
