Uh Oh! The Last Time This Happened, the Global Financial System Went Into Freefall

• WTI-NYMEX crude oil is now trading at US$29.50. It has breached US$30/barrel convincingly. We will see US$24-27/barrel oil early next week.
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• Uh Oh! The Last Time This Happened, the Global Financial System Went Into Freefall
  by http://thewealthwatchman.com/  
  Things aren’t Looking Good
  Holy smokes, 2016 is intense! The world economy is literally seizing up, and vaporizing vast amounts of wealth from investors. In just 2 weeks, over $3 trillion in wealth has been wiped out. I’ve been watching markets tank all over the entire world, and it’s starting to smell like August/September of last year again.
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  Anyone remember Black Monday just 4 short months ago? Seems like an eternity ago now.  Yet, I warned back then that the carnage felt across the global equity markets was just a warm up.  I said that shortly we’d be revisiting that action, and that what was to come would make it seem like a blip. Well, as you can see on this chart, we’ve finally gotten a crucial breakdown that I’ve been anticipating for some time now.
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  My friends, they say a picture is worth a thousand words, well folks, that chart spells absolute disaster! Brent Crude crashed through the all-important $30 level.
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  West Texas Intermediate and Brent Crude have both literally caved in to levels not seen since 2004! This is unreal!  Not even during the previous financial crisis did oil prices print such disastrously low numbers.
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  This has staggering implications for countries, populaces, and investors the world over.
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  “Watchman, so oil’s lower! Who cares? What on earth does the price of oil have to do with the state of global health?”
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  It has everything to do with it.
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  Oil Contracts and Sovereign Nations
  We live in a world that is run on oil. Oil is not only the lubricant of the global economy, it is quite virtually the engine of all major economic activity.  Without infinite, cheap credit, and a healthy oil price, global activity grinds to a halt.
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  Major superpowers in our world are heavily(too heavily) dependent upon a reasonably high oil price, in order to pay their bills, and sustain their economies and trade. Countries like Canada, the US, Saudi Arabia, and Russia are just a short list of such powers.
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  The problem for all of them, is that the Fed, with their recent interest rate hike, has just ensured that the cheap credit they’ve depended on, is now drying up around the world. This has put these countries’ energy revenue streams in deep, deep trouble.
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  Last Days of the Petro Dollar
  The Petrodollar is being unwound.  Russia just announced that they would be creating a “Russian Oil Benchmark”, where oil would no longer be traded for in US Dollars(but in Rubles), and both China and Russia will deal in energy(and with each other) without using Dollars in their trade settlement.
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  The last pillars of the Petrodollar are being demolished.  The problem is that this process will be extremely painful for all involved(though it’s necessary), because it is exacerbating the currency fluctuations, and even worse….
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  It is endangering gargantuan amounts of derivatives contracts, which are directly priced around, and based on, the price of oil.  How much money are we talking about?
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  We’re talking about trillions of dollars. Many trillions…
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  Sovereign nations, governments, and businesses have all locked in business trades and sovereign treaties, with oil futures on a forward basis, at much higher oil prices than they are now.  These countries desperately need those prices they agreed to, in order to keep the lights on, and maintain business as usual.
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  read more.

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