March 9, 2020
In case you hadn’t noticed, we appear to presently be in the beginning stages of a kind of apocalyptic scenario.
Maybe we’re not.
Probably, we are.
I can’t really tell exactly, but what it looks like is that Russia has kicked the world economy while it was down in order to ensure a civilizational scale global economic disaster. Convincing Saudi Arabia to start pumping out massive amounts of oil right when Coronavirus was in the middle of raping the markets appears to have not been a coincidental action.
But Russia says it’s ready.
Because if there is one thing Russians are good at, it’s being poor.
Russia’s sovereign wealth fund has enough reserves to cover budget deficit for years, even if oil prices stay between $25 and $30 per barrel, the Finance Ministry announced amid a dramatic oil market crash.
Despite Monday being a public holiday in Russia, both the Ministry of Finance and the Central Bank were quick to react to the overnight drop in oil prices of nearly 30 percent. The former said that the Russian National Wealth Fund has $150 billion (more than 10 trillion rubles) worth of liquid assets from additional oil and gas revenues, which is enough to offset a possible shortfall from falling crude prices for 6-10 years.
Last week, OPEC agreed on deeper production cuts to boost oil prices amid the coronavirus outbreak, but Russia refused to support the initiative, recommending prolonging existing cuts. As a result of the disagreement, the current deal expires next month, creating the risk of additional oversupply in the market, which is already bracing for reduced imports by coronavirus-hit China, one of the main importers of oil.
In a shock announcement on Sunday, Saudi Arabia said it wants to increase oil production instead of cutting it, and also offered a discount for buyers of its oil. The move was seen as the start of a price war, triggering massive losses in global benchmarks Brent and WTI.
If we are facing a global apocalypse, then it is pretty important that Russia abides.
If Russia abides and the West falls off the cliff it’s been riding towards for the last seven decades, then the pieces can be picked up. If Russia falls with the rest of the planet, well, then that means the jig is up.
But who knows.
Maybe the virus will slow down in the rest of the world like it did in China before the bottom falls out of the economy completely. We’ve really only got to make it until the weather breaks, in which situation the virus dies and everything goes back to normal.
Maybe we’re all just craving a happening, and this isn’t really as bad as it looks like it might be.
But I’ll tell you, whatever the experts say, when I see this:
My thought is always: “surely, God will cleanse us with fire.”
And I think that’s fine.
This ride was never intended to last forever.