1) If I were President Joe Biden, right now, I would order every barrel of oil from the US Strategic Reserve to be released to the market.
My sincere hope would be to panic the oil market with the surge in supply and crash the oil price.
This would be my way of telling Saudi Arabia and the rest of OPEC+ to shove their latest production cut where the sun don?t shine.
What an astonishingly cynical move they just pulled in the middle of an energy crisis.
I can only take comfort from the fact that this is just another nail in the coffin for the oil industry.
Any move to prop up a high price, and in such a manner, only speeds the transition to electric vehicles. Don?t sell your lithium stocks.
It won?t be long before the incantation of OPEC ministers and Saudi officials comes but will carry as much weight as Scott Morrison?s integrity.
However, right now, we are not at that happy day, and oil is still at risk of going back to more than US$100.
That?s not what we want to see to keep inflation and interest rates in check.
The problem isn?t so much petrol, but what the oil industry calls ?middle distillates? — jet fuel and diesel.
Diesel is in short supply, and if it spikes, it could drag crude prices back up with it.
That means, in general terms at least, we may still have more volatility in the share market in the weeks ahead.
Personally, I see any downside in the market as a chance to accumulate shares for the long term at cheaper prices.
I?ve been buying for my super fund lately, with some puts as protection from the general market distress.
2) I?m currently in Spain. It?s interesting to view the world from here. Even though Ukraine is geographically much closer, the war feels just as remote to daily life here as it does in Australia.
What about inflation?
There?s no doubt that prices are up in Spain since the last time I was here.
However, overall, the talk of a European ?recession? seems more urgent in the newspaper than to anyone I speak to.
It might be that Spaniards, in general, are less preoccupied with financial markets than we are.
Retirees get a guaranteed State pension, and I?m not sure the average Spanish worker has enough spare cash to dabble in the stock market, not that I think they would anyway. It?s a different culture.
(Spanish wages are not high. My parents-in-law live in a wine-growing region called the Ribera del Duero. A labourer cutting the grapes etc., just gets paid 50 euros a day.)
However, we?ve seen over in Britain how even government bonds and so-called ?conservative? pension funds are hostage to ructions in the markets now.
There?s so much leverage in the system, and the whole edifice is so dysfunctional and distorted, nothing is truly secure.
Proponents of Modern Monetary Theory will argue that British State pensioners can still get their money because the Bank of England can print up all that is required.
What I don?t know is how they view the exchange rate. The British pound has been flogged lately on the currency markets.
Anyone from the UK is seeing their international buying power go down, like they have for the last century as the UK?s long decline continues.
I read the most extraordinary comment last week. An American writer wrote ?some see the UK moving to third world status?.
It?s extraordinary to me that the once mighty Great Britain, which became the world?s richest and most powerful country through innovation and industrialisation, could be viewed in this way.
I love England. But it can?t be denied the UK runs at a trade deficit, current account deficit, and a budget deficit. Its North Sea oilfields are in decline.
British banks finance property transactions, not innovation and development.
The pound?s status as a reserve currency is based on history, not strength.
In other words, Britain is sliding into long-term irrelevance the same way the oil industry is.
Countries like India and China will quite rightly argue why on Earth they should give two hoots about a pissy little country off the coast of Europe with 2 cents to rub together and populated by a bunch of old fogeys drinking tea.
The future is in Asia, and Australia is well-placed to be part of this shift.
Here?s another observation from Spain: the standard of material living in Australia is, at least as far as I can tell, the highest in the world.
Every time I leave, I?m reminded of it. We are the lucky country indeed.
Editor, The Daily Reckoning Australia