Iran conflict latest: Trump says Iranian negotiators "begging" for peace deal
The financial markets are largely ignoring the fact that the U.S. Navy is off the coast of Venezuela and continues to sink boats transporting cocaine and other illegal drugs. Venezuelan President Nicolas Maduro has reportedly talked with President Trump, which is raising speculation that he may seek asylum. The U.S. action in Venezuela is expected to be a boon for Venezuela’s domestic oil industry, which has fallen into disrepair, but could boom again with help from U.S. energy companies. Long-term, a resurging Venezuelan energy sector would likely cause crude oil prices to remain soft due to all the new supply that could hit the world market.
Critics of President Trump, like Colombian President Gustavo Petro, have pointed out that the U.S. action against drug boats is really about exploiting Venezuela’s vast crude oil reserves. Since the U.S. military has also been attacking boats from Colombia transporting drugs, President Petro has been humiliated and is in danger of losing his Presidency.
This is a good time to point out that the risk of deflation is rising not only due to lower crude oil prices, but also due to the fact that the U.S. is importing deflation from China. If you do not believe me, just go to Best Buy or Costco and check out the price of TCL (Chinese) televisions, where you can buy a 98-inch TCL QLED television for $1,149.99 or a 98-inch TCL mini-LED television for $1,599.99. In case you want a bigger television, TCL also has a 115-inch mini-LED television for $9,999.99 at Best Buy. In other words, just like China dominates batteries, solar panels, and rare earth minerals via TCL, they are also now trying to conquer LG, Samsung, and Sony’s television dominance.
Despite anticipated Fed key interest rate cuts, home and rental prices remain soft, which should result in lower shelter costs via owner’s equivalent rent, which has been the main inflationary component in the Consumer Price Index (CPI). Although the Labor Department will not be reporting an October CPI due to the federal government shutdown, the November CPI is expected to be soft.
There have been a lot of reporting around higher electricity prices due to data center demand, but I want to assure you that since the U.S. is the largest natural gas producer in the world, there will be plenty of natural gas to generate electricity for most of the U.S. Natural gas prices are very sensitive to cold weather, since demand soars during cold fronts, so I am selling some of my natural gas related stocks during peak winter demand.
