Oh, I'll pick. Plus Just announced that they're going to reduce Supply by 1.16 million barrels per day. What does this mean for the U.S Economy. What does this mean for the U.S Stock Market.

All of this I will explain in depth in today's video. But first things first: don't click nothing. Don't smash nothing. Don't buy nothing.

Now for those of you who are short in time, here's the bottom line so you don't have to watch the entire video. I Respect your time. So here it is: OPEC Plus, by reducing the supply of oil is intentionally driving price upwards. As price goes up, we will probably hit around a hundred dollars per bill.

Unless of course some unforeseen things happen. And unforeseen things have been happening since 2019, almost on a daily basis. So who knows. But if their plan works and oil prices go from 80 to 100, this is not good for the US economy because it means that it almost certainly puts the United States in a collision course with stagflation.

Now, stagflation is literally like dating somebody who isn't one out of ten in looks, one out of ten in personality, unpleasant, rude and disgusting, and just generally and horrible person. That is stagflation. It means high unemployment High inflation, two combinations or rather one combination you never want to have. Now that's the bottom line.

If that's all you needed, you're free to go. But I urge you to stay with me for the next five minutes because I will show you some important stuff about what just happened that nobody and nobody on mainstream media is stuck about because this is actually a little bit of nuanced stuff that they just can't process. Now here's what's going on here. now.

You might have noticed this difference OPEC Plus versus OPEC When everybody talks about the global oil cartel, everybody says OPEC but now it's coming from OPEC Plus, there's a huge difference between OPEC and OPEC plus the small Club. The 13 countries basically dominated by Saudi Arabia and UAE much like the United States and Germany dominate NATO Well, that's called OPEC The Organization of petroleum producing Countries OPEC Plus has another 10 countries in it, but only one that truly actually matters which is Russia Russia is not a member of OPEC but it is a member of OPEC plus. So OPEC plus 23 countries. They dominate the global market of oil and by the way, curtail which is what they are and like what people think isn't a term that's been derived out of drug cartels in South America and Central America.

No, no, a cartel is an economic term. It just means that a number of Market participants are colluding to control the price and that's exactly what's going on. OPEC Plus is trying to do it. The reason is that Russia needs money to fund its war in Ukraine Ever since the oil prices went down, the Russian economy, which depends on one quarter of its economy on oil, is basically taking the massive hit.

The global supply of oil is a pain in the neck in Russia's ability to fund its war in UK rain. Putin's one Legacy is the fact that he took the Russian economy from 200 billion dollars of GDP in 2000 to 2.3 trillion in 2014. he 10xed the Russian economy in one and a half decades. That's his legacy that we will take with him to the grave.

but now it's reversing since he invaded Crimea first and now Ukraine his GDP has been spiraling downwards. According to all estimates, Russia's GDP will come down from 2.3 trillion in 2014 to 1.6 trillion in 2023. That means that the Russian GDP will shrink by one-third in eight years. That's insane.

and part of it is the oil prices declining. He needs that money right now to save his economy to keep it afloat and to keep funding the Ukrainian war. On the other hand, the Saudis are basically saying well, you guys didn't help us when oil prices were zero We're asking for you guys, the United States and the West All of us told us well, that stuff luck. Now it's your turn to pay the price.

The Saudis need cash to fund their next 10 years of transition out of oil and into a service economy, which is what they're trying to do. They're trying to grab every single dollar they can without crashing their clients which is about a hundred dollars. The Saudis knows exactly how much we are good for without suffocating to death but choking and gagging all the way through. Which is a hundred dollars.

So that's the story here. The Saudis and Russians are the ones leading the charger. That's why you've seen prices go from 120 dollars to eighty dollars, and now they want to push it back a little bit up towards 100. So Russia and the Saudis can actually have some tchotchkes.

Now look, as far as the FED goes, it's not a good time for this to be happening. The Federal Reserve is now at a point where raising interest is endangering the entire Regional banking sector. In the US. I've explained why multiple times the higher interest rates are basically making their assets worthless.

Which means that if people try to liquidate their deposits these banks are in deep deep do do. Which means that lowering interest rates or keeping them at least not higher than what they have right now is the priority for the FED before inflation. Now, if oil prices go spiking up from 80 to 100 inflation will get worse, it will require more interest rate hikes. But the fit right now cannot do it without slamming the brakes on the entire existence of the U.S Regional banking sector so they will have to just eat it.

And unfortunately, this means higher inflation while still unemployment going up eventually, which is what the FED is trying to get at. So what this means is we're going to have six seven, eight percent inflation with four five, six percent unemployment, which is pretty much stagflation. Now, the Saudis also have another angle here to play. Don't forget the Saudis have always felt like they've been owned by the US and now it's their time.

They want more help on the military side. They have their own Rebels they're dealing with. They want more support in Yemen They want more money for the 10-year plan to get out of oil. It's mainly U.S money.

and they want the US to push to stop this renewable energy push so that they actually can. You know, keep selling oil for longer. So the Saudis have a clear agenda here to leverage the US to push down and basically show the US why the Saudis matter And they're not afraid to use this leverage as we've seen, they've said no to Joe Biden when he was asking for more oil. Now I Want to play devil's advocate here for a second? The Saudis have already done this before in October of 2022.

When the Saudis did this before, they reduced production by 2 million barrels a day, everybody was saying that it's basically them trying to money grab Etc et cetera et cetera. But they were Vindicated for that because just a few months later we saw that demand actually went down because countries were stockpiling oil and what they did was actually on point with keeping the current status of oil prices and supply and Demand in check. So their first time not the first time, but I mean the last time sorry that they've done this was for economic reasons, not to money grab higher oil prices. at least in hindsight, that's what we know.

Now this time it's a whole different story. I Think this time what this means is the Saudis now and the UAE and the bigger players. Iraq Russia They understand that the United States is going into recession if the Us is going into recession if Europe is headed towards the recession. By definition, this means that the demand for oil is going to be lowered towards the second half of 2023..

If they expect a demand decline in the second half of this year, the time to start dropping the supply slowly is right now because they don't want to get caught with massive supplies with people stockpiling oil and demand dropping. Which means the price will go down like it happened in the pandemic. Well, not exactly like, but close to that. So the Saudis are not basically in the UAE are saying guys, we expect a recession because we expect the recession in the second half 2023.

Now we're going to start cutting production so it's not just all for a money grab. Let's be clear here and you have to understand right now. Also, there's one other thing. There's a battle going on.

Nobody likes short sellers. I mean when I say nobody I mean companies that are being shorted pretty much. and the the Saudis and the UAE and the rest of OPEC. They don't like when people short oil because when short sellers actually are involved, especially in trade like all oil, that pushes the price of oil down and it hurts the Saudis in the UAE.

So they're trying to shake off all these short sellers, it's not that has nothing to do with the United States or the money grab. and none of this thing. the Saudis and OPEC and OPEC plus are trying to shake out all of these short sales because right now it's the highest percentage of positions we've seen Short Selling oil since 2020 since the pandemic started and the Saudis basically saying, well, we're about to shake you off, Watch us do it, hold our beer right and maybe not beer because the Saudis but you get my point so that has nothing to do with us also. And now I Want to talk a little bit about what's next for the U.S economy and unfortunately, that is deflation.

Look, um, on the one hand, the Saudis and Russia and OPEC and Open Plus will not go any further. They want the price at a hundred dollars because you might logically ask yourself, well, Tom why wouldn't they just press us even more? Why wouldn't they go and go 120 140 and absolutely squeezes Because that will crush economies that will close down companies that will basically kill the goose. You know the story about the farmer who finds the goose that lays golden eggs and every day there's a new egg. Well, if you kill the goose, there's no more eggs.

and if they actually race passes to 120 140 150 per barrel, economies will crash and their clients will be gone so they can't afford that. So the Saudis want it at 100 so there's no fear of it going consistently for a long time over a hundred dollars. On the other hand, look, the United States is in trouble and they've kind of behaved themselves into the situation. Biden Promised to the Saudis that he will replenish SBR the petroleum reserves this year and they thought that he would actually make good under promise and they didn't They basically said, well, we change your mind, we're not refilling Sbrs, which means you know they're basically lied or or change their mind and the Saudis are pissed.

As far as the U.S economy look, higher oil prices mean higher inflation, higher inflation means profit margins will go down, people will lose their jobs, higher unemployment, and eventually because the lower rates of interest that if fed will have no choice but keeping due to the banking sector being in trouble. that means stagflation, which is not a good sign. This situation because of what just happened shows us that not only that, OPEC plus are betting on the recession, they're also kind of actively causing it or just kind of giving it a little nudge. and I think at this point it's very hard to see how the US avoids the recession 2023 in the second half.

But hey, craziest things that happened. so we'll see how this plays out. If you have any questions for me, make sure you comment below Again, If you haven't yet, check out my platform called stock. MVP the link will be below.

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Thank you so much! I'll see you next video.