Imagine your household income dropping by 70 percent.
Think of the financial decisions you would be faced with. You would be looking around at what you could sell to raise cash to pay your bills. Some people would become desperate and do things they never ever thought they would do in their lives to get money.
Oil last peaked at $114 a barrel in 2014.
It is now hovering near $30. There is tremendous pressure to go lower. Oil has caused a seismic wave in the global economy that has dealt the major oil producing countries of the world a massive financial blow.
At this moment the OPEC nations of the world are in liquidation.
Individuals, businesses and Governments of these countries are looking at their financial house and deciding what must be sold. They have hired consultants and they are looking at real estate, stocks, bonds, and Government assets that can be used to raise cash.
Each of them is in liquidation right now just to maintain their standard of living. Our research indicates that the major Saudi producers can last 5 years at this rate. But that was when oil was at $40.
At some point, it’s going to end badly, unless oil goes back to $100 a barrel.
At $40 a barrel, frackers can make money. For this reason, when and if oil comes back, we expect it won’t go much higher than that.
It’s going to be a long time until OPEC sees $100 a barrel, if ever.
For the OPEC nations it’s a game of last man standing.
Or, will it be something else?
We think something else…