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Page added on December 20, 2014
Global Systemic Financial Crisis 2015: Geopolitics, Oil and Currency Markets
For almost two years, by combining various points of view (speculative, geopolitical, technological, economic, strategic and monetary…), we have continued to anticipate a major crisis in the entire oil sector.
Today, no one doubts the fact that we are actually at that point, and the GEAB must therefore anticipate the consequences of this veritable atomic bomb, which has begun to blow up all the old system’s pillars: everything which we have known, international currencies, financial markets, the US, the Western alliance, world governance, democracy, etc.
Global systemic crisis: the end of the West we have known since 1945
Here, we would like to look back on a historic GEAB anticipation, that of Franck Biancheri in February 2006, which announced the beginning of the global systemic crisis under the title “the end of the West we have known since 1945” (1). It will have taken nine years for this Western world to collapse (or seven years, if we begin the process with the 2008 subprime crisis, as one should really do)… During these nine years, the GEAB has worked to educate on the crisis, with the avowed aim of raising all the existing solutions to exit it as quickly and as painlessly as possible. Apparently, outside the work carried out by the BRICS which, also anticipated by the GEAB, got through a huge task to lay down the foundations of tomorrow’s world, the Western world, meanwhile, has made some positive efforts here and there, signs of which we detect in some places. But at the end of 2014, and after the huge destabilization caused by the crash of Euro-Russian relations in the Ukrainian crisis, our team is struggling to put forward a positive scenario for the coming year.
2015 will show the complete collapse of the Western world we have known since 1945. It will be a gigantic hurricane, which will blow and rock the whole planet, but the breach points are to be found in the “Western Port”, which hasn’t been a port for a long time but, as will be clearly shown in 2015, has been in the eye of the storm in fact, as we have repeatedly said since 2006. Whilst some boats will try to head offshore, the Ukrainian crisis has had the effect of bringing some of them back to port and firmly re-mooring them there. Unfortunately, it’s the port itself which is rocking the boats and it’s those with the strongest moorings which will break up first. Of course, we are thinking of Europe first and foremost, but more so Israel, the financial markets and world governance.
Of course peace is at stake, a peace which is no more than a vain word, moreover. Ask China, India, Brazil, Iran, etc., if the West still conveys any image of peace. As for democratic values, what we show serves more as a foil than a model… to the extent that the universal principle of democracy is relegated to the value of culturally relativized concepts and finishes by serving antidemocratic agendas of all ilks, in Europe and elsewhere. Yet it’s not the democratic principle that is the problem (quite the opposite is needed to reinvent ways to apply it, in partnership with the new emerging powers), but really the West’s inability to have known how to adapt its implementation to society’s new characteristics (the emergence of supranational political entities, the Internet which is transforming the social structure..)
The oil crisis is systemic because it is linked to the end of the all-oil era
Let’s return for a moment to the principal characteristics of this systemic oil crisis which we have analyzed. To quickly summarize and to highlight the systemic nature of this crisis, to better position our anticipations which follow, it’s the oil market’s world governance system OPEC, which has been undermined. The US, which was its master until around 2005 (2), has seen the arrival of the emerging nations whose levels of consumption has inevitably made them joint masters.
US shale oil production – Source : HPDI, LLCAnother strong trend is combining with this major trend break, currently little mentioned in the media, that of the end of oil as the world economy’s primary energy source. And it is this second factor that now makes the situation totally uncontrollable. Prices are falling apart because the oil era is coming to an end and nobody can do anything about it. We anticipated this many months ago (4) : China is creating an all electric car fleet (5), and, in so doing, will turn the global car fleet into an all-electric one: once the technology has been mastered and mass production becomes inevitable, all the world will go electric. We anticipated that this transformation would be in place in less than 10 years and that, in five years, the turning point as regards consumption would be reached. But a year at least has passed since this anticipation. Speculators of all stripes are starting to see a horizon four years out (6).
In reality, « peak oil » is what LEAP calls a “successful anticipation”: putting it into perspective, has allowed the problem to be “avoided”. Fear of a shortage and a price explosion, good and bad avoidance strategies (renewable and shale), all combined with a huge economic downturn and, as a grand finale, and an ecological agenda whose resumption we will see from this year (7), and the world is “ready” to close the oil era… except that, to this, the players existentially related to this commodity will make themselves heard loud and long before disappearing.
Here again, so that our readers don’t misunderstand: for a long time oil will continue to be used to fuel the world’s engines and factories (it even has many years ahead of it again since the risk of shortage has been postponed for several decades), but the “era” of sovereign oil is ending and, of course, that constitutes a systemic change.
In the Telescope section we further examine the consequences of this systemic oil crisis, particularly on the financial markets. These financial markets, which have well “resisted” six long years of crisis, suffocating the real economy in their vice and proving the extent to which they were the crux of the problem, will not be able to survive the shock that they are about to get, from the oil industry on the one hand (a central player), and the dollar on the other (financial world’s main tool). But, as if it weren’t enough, other bombs are ready to explode…
25 Comments on "Global Systemic Financial Crisis 2015: Geopolitics, Oil and Currency Markets"
penury on Sat, 20th Dec 2014 11:12 am
In other words BAU will continue until it can;t and then something else may happen. Perhaps
ghung on Sat, 20th Dec 2014 12:01 pm
“2015 will show the complete collapse of the Western world we have known since 1945. It will be a gigantic hurricane, which will blow and rock the whole planet…”
Maybe someone should make a list of ‘2015 doomsters’ and compile their research. Seems a lot of folks, some more studious than others, are expecting the next 12 months to be an inflection period. Then again, I heard that about 2012, 2013, 2014….
Gail Tverberg seems convinced that 2015 will be a pivotal year, and J.M. Greer’s doom-o-meter seems to be moving into the red. Who else? Slow train wreck or black swans? Some combination of both?
shortonoil on Sat, 20th Dec 2014 12:07 pm
By 2020 it will become self evident that the oil age is drawing to its conclusion. The question now is what will be the reaction of society. Fight wars over a commodity that will soon have no value, or begin the way over scheduled transition that will be needed for a world not dominated by oil. It will be the ultimate test of human nature versus some dubious claim to intelligence!
Perk Earl on Sat, 20th Dec 2014 12:20 pm
“Then again, I heard that about 2012, 2013, 2014….”
Me too, Ghung. I think a lot of interesting things could happen in 2015 but not collapse. Civilization is a big lurching, listing ship, but it still has a lot of momentum. Things will just progressively get more strained even fractured towards the point in time when as Short writes “…it will become self evident that the oil age is drawing to it’s conclusion.” What year that is exactly is hard to say, but 2020 is certainly a good guesstimate.
TPTB will just keep changing the rules and more people will have a lower standard of living, and many more will become disenfranchised but people seem to take whatever they are dished out, accepting their new lower state much like we accept changing conditions in a dream while we are sleeping. So there is still a lot of room for contraction up to collapse.
ghung on Sat, 20th Dec 2014 12:28 pm
Short: “….or begin the way over scheduled transition that will be needed for a world not dominated by oil….”
I’m not sure by what mechanism that may occur, Short, considering that all of our systems have oil as the common denominator, not to mention that the global community can’t even come close to any action on things like climate change. This will be an evolutionary process with all of the associated winners and losers. Considering our level of overshoot, I see the losers becoming the majority.
It all cooks down to rapidly declining available energy per-capita. That is the simple reality of life on Earth.
J-Gav on Sat, 20th Dec 2014 12:51 pm
Ghung and Short: I’d go with the “combination of both” hypothesis (Ghung). Some of our present arrangements will have fallen apart by 2020 and others will kindly have the patience to wait a bit longer (Short). I won’t bore you with the details of my thinking here but the upshot is that within less than a decade our plight will be much clearer to a much greater number of people.
After all, how much debt as hot-air, crapola investments in junk derivatives can any system sustain before it takes a dive?
Apneaman on Sat, 20th Dec 2014 1:01 pm
BAU. What does that even mean? I think that many people do not realize the concept of shifting base lines. If one does a thorough comparison to the world of only 10 years ago, I think you will find major differences. None of them good and all getting worse. No one can really know how resilient the system is, but it is plain to see that it has been steadily eroding away. There is nothing new under the sun. All that is different this time is that it is global. Oh and the fact that nuclear war and climate change are very real existential threats.
Jerry McManus on Sat, 20th Dec 2014 1:03 pm
It’s probably a good bet that our near future will look something like that presented in the movie “Children of Men”. Not specifically the premise of the movie that women become infertile, but instead the overall depiction of industrial society in a terminal malaise of decline and decay.
Entire populations will be walled off into permanent gettoes and more or less left to fend for themselves.
Meanwhile the people who have managed to “keep up appearances” will find themselves living in a brutal totalitarian police state that serves at the pleasure of the super rich.
Oh, wait, we already live in that world.
OK, that’s easy then: Just picture what we’ve already got and make it 10 times worse. Now make it 100 times worse. Good, that’s got it.
The wild card, of course, is nuclear holocaust, in which case we can expect a world more like that presented in the movie “The Road”.
Then again, it probably won’t take long for runaway climate change and Fukushima style meltdowns due to power grid failures to get us there even if the missiles never fly.
There you have it: Despair followed by destruction. Simple, really.
Northwest Resident on Sat, 20th Dec 2014 1:56 pm
2015 could easily be THE year that we enter the total collapse stage. I hate to break this news to those of you who are thinking 2020 or at least a few more years into the future, but fact is, the one and only thing preventing a total economic collapse right now is a combination of a) massive propaganda combined with b) total manipulation of the stock market combined with c) massive increases in debt — or at least the FED jawboning the “likelihood” of continued increases in debt (cheap and easy money).
The entire world financial system is hanging by a thread, with a relatively few decision-makers holding that thread pinched between their thumb and index finger. If they just let go, then the entire global economy will collapse in a relatively short period of time.
We’ve seen the total collapse coming on in the stock market several times already, maybe more. But the “plunge protection team” goes undercover, saves the day, pumps the market back up at the last moment. How many times has that happened? What if “they” just step aside and let it go? Big time crash, that’s what. Leading to utter panic. Leading to terror and disillusionment and quickly devolving into total chaos.
If you think we’ve got another five years or so before total economic collapse sets in, then you must be basing your prediction on a belief that TPTB are going to do their usual slight of hand, keep the market pumped up, keep the new trillion$ pouring in.
I know that many here and on other forums believe that the collective group of very wealthy and powerful individuals who comprise “TPTB” are of a single mind to stretch BAU as far into the future as possible, to desperately cling to their privileged stations in life, to burn every last accessible drop of oil, to totally waste and despoil what’s left of our environment, to send millions to their deaths in war over oil and scarce resources — all, just to live the dream for another year or two.
No doubt, there are many in “TPTB Club” who fit that bill. But I believe that more noble and honorable and wiser powers will prevail.
If you care about the future of humanity on planet earth, long term, and if you treasure life and nature and all things good, then there is only one thing to do. Take the bitter medicine. Get it over with. Collapse. Reset.
At this point, when we collapse is totally dependent on the powers that be. Or, any number of things could happen — natural or man made — that push us over the edge into total collapse. There are any number of those unknowns that could happen in 2015. But if not, then once again, it is only by the determined efforts of powerful forces that we are not already swirling down into collapse. Who knows when those powers when let it all go, or simply find it unable to hang on any longer.
Prepare for 2015 like that IS the year it all goes down. Any amount of time beyond that is a gift, imo.
GregT on Sat, 20th Dec 2014 2:17 pm
Just as the last century has seen exponential growth, the de-growth of the age of decline will also be exponential. When the line is crossed between expectations of growth, and exponential decline, tipping points will be reached. Then it will be Katy bar the door.
We had our chance at a pseudo-technological utopia. We blew it on lust, greed, and over-consumption. One year, 5 years, 10 years? Somewhat irrelevant. Those who have made plans for the coming bottleneck might make it through to the other side. Those that haven’t, are most certainly heading towards a world of hurt.
Perk Earl on Sat, 20th Dec 2014 3:48 pm
“We’ve seen the total collapse coming on in the stock market several times already, maybe more. But the “plunge protection team” goes undercover, saves the day, pumps the market back up at the last moment. How many times has that happened?”
NWR, we were discussing this the other day and at the time the Dow had plunged in a few short days from 18,000 to 17,080. You said the market was being manipulated and I said well let’s see what happens and see if that is true. Well as it turns out the Dow went rocketing back up and I had to wonder if you were right about the manipulation. I mean it’s not like this is the first time, however the underlying reason was Yellen pushing off interest rate hikes for another period of time – how many times has the Fed acted in the best interest of the Stock market by putting off int. rate hikes? It’s sort of a broken record at this point because it’s becoming obvious that if interest rates rise all hell breaks loose. So they have to keep them down but also need to a reverse (football misdirection play) to ACT like they can raise interest rates if they so choose. Bah! No way, it’s propaganda at this point as you point out NWR. So I now fully see and agree with this idea of manipulation, or maybe a better way to put it is; “No willingness to step over the edge of the cliff.”
bobinget on Sat, 20th Dec 2014 4:06 pm
I was so hoping one of you intelligent posters would have explained the ‘collapse article’ in
question. To me it was absolute nonsense topped off with half-truths like cherries on a sunday.
I’ll keep searching.
J-Gav on Sat, 20th Dec 2014 5:23 pm
Bob – “Explain the “collapse” article in question?” Not sure I understand just what you’re looking for …
Globalresearch.ca is not one of my favorite sites and I’ve written to them several times explaining why. I still read the occasional article.
The same could be said of LEAP and GEAP as far as I’m concerned – they’ve been predicting collapse next month for years …
However, that doesn’t mean some form of collapse, as yet unidentifiable, is not in the offing. Look at the details and then go to the big picture (or vice-versa if that is your preference), and see what you get. If you believe it’s BAU forever, my condoleances are all I can offer.
Perk Earl on Sat, 20th Dec 2014 5:29 pm
“2015 could easily be THE year that we enter the total collapse stage. I hate to break this news to those of you who are thinking 2020 or at least a few more years into the future,…”
Good for you, NWR for asserting a prediction, although ‘easily’ I guess couches it a bit, but nonetheless it’s a gutsy call. I still stand by things will keep going albeit sh^t will happen along the way. Anyway, we can agree to disagree on timing but still have similar perspectives on the predicament. Don’t throw the baby out with the bathwater, lol.
Hans Zandvliet on Sat, 20th Dec 2014 6:30 pm
It would be very handy to explain what GEAB means, the first time one uses this abbreviation.
The article is interesting enough, but I still don’t know what or who the GEAB is/are.
Makati1 on Sat, 20th Dec 2014 7:27 pm
NWR, it appears that we are on the same page, for the most part. Collapse has not happened because TPTB have done things not expected and are getting away with it … for now. But the world is waking up to the lies and the corner is getting tighter all the time. If not 2015 then 2016 for sure as there are too many black swans up there that are getting tired and hungry.
The Titanic was sailing along at full speed until it hit the iceberg. It took 2 hours and 40 minutes to disappear below the waves. So much for “unsinkable” ships or financial systems.
Perk Earl on Sat, 20th Dec 2014 8:44 pm
http://www.zerohedge.com/news/2014-12-20/150-years-global-monetary-policy-summed-one-word-and-1-chart
NWR, Zerohedge is on the same page as you are with a chart showing things unraveling in 2015.
J on Sun, 21st Dec 2014 1:18 am
Global Europe Anticipation Bulletin (GEAB)
shortonoil on Sun, 21st Dec 2014 7:00 am
I hate to break this news to those of you who are thinking 2020 or at least a few more years into the future,
The statement above stands on exactly what it says, nothing more. By 2020 shale will be gone, ultra deep water will be gone, bitumen mining will be all but gone, and high sulfur extra heavy will be gone. The Giants will be coming off their plateaus. The dumbest smuck out there will know that the oil age is ending. This determination results from straight forward calculations of the energy dynamics of petroleum production.
It is reasonable to assume (since we have made ZERO preparations for this inevitable event) that at some point before, or very shortly after it occurs that our overly complex, industrialized, wealth, and power concentrating society will unravel. There is a very high probability that will occur sometime between now, and 2030 when the average barrel hits the dead state. 2015, 2016, 2027 – I don’t have a clue, and it is very likely that no single year will the “event”. Like a super tanker at sea that runs out of fuel, its takes miles for it to coast to a stop. But stopping is absolutely guaranteed to happen.
action on Sun, 21st Dec 2014 10:04 am
When the oil age ends so does modern society, a complete collapse. The appex of human technological inovation, scientific discovery, and understanding of our place in the Universe will be past, implying a halt to these things and then decline as population shrinks and they are forgotten. Religion and mysticism is going to make a big come back, its already prolific but there will few to question it in tbe future and a world lived by religion, well history shows what that looks like and it isnt pretty. Nothing will replace oil for continuance of modern society.
Northwest Resident on Sun, 21st Dec 2014 10:30 am
shortonoil — I do not doubt your calculations and assessment for what 2020 will mean for oil extraction, exactly as you have described. I just personally don’t think we’ll make it that far. I suppose we could, assuming that TPTB continue to pile up debt to keep the economic bubble inflated and they continue to lay the propaganda on thick and heavy to keep the masses unaware and complacent. But, based on nothing except my own intuitive and common sense awareness of how dire our current situation is, I doubt it. Five more years of milking BAU for all it is worth would be insanity — a plan of action that would at the end result in pollution levels that put us far beyond the point of no return and that would burn nearly every last drop of reasonably accessible oil leaving approximately zero oil for a much scaled down human population to reboot with. IF TPTB are collectively determined to drive humanity to that point of despair and no hope just to hold onto their privileged status for another five years, then humans will get what they deserve so richly. Being an optimist, I prefer to believe that wiser forces will prevail, which means burning down this rat and vermin infested house of BAU pretty damn soon, creating a situation where what’s left of humanity afterwards can rebuild in a world that still has some sustenance to provide humans. And all “they” have to do to get the fire started is to just step back and watch as the already glowing embers that our global economy rests on just take off on their own. The ONLY thing that is keeping it from going up in flames right now is their frequent rescues. Yeah, I see how “they” could keep it all together until the bitter end, I just don’t think they will.
Perk Earl on Sun, 21st Dec 2014 12:08 pm
“The ONLY thing that is keeping it from going up in flames right now is their frequent rescues. Yeah, I see how “they” could keep it all together until the bitter end, I just don’t think they will.”
Power and money are the ultimate aphrodisiacs. At the height of their power and monetary status they aren’t going to push it right to the breaking point, but instead are going to voluntarily see the error of the trend things are headed towards and try to change course? How would that even be attempted? Not only are TPTB fully invested in BAU, but the people are too. For example a recent poll showed 59% of Americans were in favor of torturing prisoners to ply them for information. So if regular people are willing to give the go ahead for torture to maintain a feeling of security regarding their day to day BAU lives, then they want this system to keep going just as much as TPTB.
Now, from a standpoint of understanding the implications of that eventuality, sure it makes no sense to us here on this board to just keep going, but most people are not only unable to comprehend such an outcome, but they would immediately sink into denial, then if pushed on the topic further get quite angry. So in my opinion it’s not only TPTB but the automaton masses that want to remain steadfast on this path, hell or high-water.
It’s unfortunate, but most people just want what they want and don’t care about the air pollution, the 6th extinction event brought on by man, AGW, or anything else. They are so self involved it’s narcissistic, but that’s the situation. But it also reflects that if consciousness is not evolved enough to make changes as necessary when limits are being approached, it’s imperative that collapse does occur to force a change in that consciousness.
This civilization will be pushed in any manner available until it hits limits that force it into some other form. The form is changing as we speak, with ZIRP, QE, other types of stimulus, bailouts, surveillance on citizens, arming local police with military equipment, ignoring AGW, whittling away at people’s rights, and so on. Those changes are evidentiary indicating TPTB and its complicate citizenry are in lockstep to drive the Chevy to the levy.
penury on Sun, 21st Dec 2014 12:45 pm
NWR, I agree with your assessment but, the truly insane appear to have control of this scenario. If the only interest of the PTB is the survival and enrichment of the PTB then the hardships and despair that they create among the 95% is frosting on the cake to them. For a indication of their intent watch your state legislature when they meet. This local action will signal what the national government will do. 1. Increase MIC. 2. Reward the rich, penalize the poor. Mission accomplished.
Makati1 on Sun, 21st Dec 2014 7:01 pm
Bring on collapse! The sooner the better in all ways, but it has to be total so even the TPTB are taken down. Nothing less will save humanity.
Jim on Sun, 21st Dec 2014 9:43 pm
Having followed the ‘peak oil’side of things for over 10 years, I’m frankly amazed TPTB have managed to keep things together this long. Yes we have an almighty crash ahead which may or may not happen in 2015 but is inevitable regardless. The debt situation is unsolvable.
Of all my many information sources only Richard Heinberg seems to have accurately predicted how this will pan out with the early parts now proved as fact. To get a better understanding of what we’re facing I’d strongly recommend reading ‘The Party’s Over’ followed by the ‘End of Growth’. For myself, what’s unfolding is all contained in these books.