OPEC, from Duncan Coker

November 30, 2016 |

 I grew up in the 70s and when I hear OPEC it always brings back vague, distant memories of waiting in the gas car line in our Pontiac LeMans, Nixon and the Bee Gees, sometimes all at once. What I did not know then which I know now, is that in some countries when a group of competitors gets together to set production and price levels it is considered an illegal activity, called collusion. Proving again when the crime is big enough it can go unfettered.

Fortunately, the arrangement is along the lines of a Puzo novel where enforcement and compliance are very difficult and the family business might not make it to the next generation. There are larger forces at work including cheaper alternatives, better efficiency, new reserves, and the technology to get at them. I predict in the years and decades ahead that OPEC will be looked back on with a wistful relevance somewhere between ABBA and frozen fish sticks.





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1 Comment so far

  1. alexandre pinto on December 1, 2016 2:53 pm

    i remember how amazed i was the first time i understood what OPEC was and how contrary it was to everything i had always been told.

    the same thing happened when i realised what inflation meant and what all the central bankers of the world were openly trying to do.

    as you said bigger forces are at work, not only for the oil cartel, but most importantly for us, as citizens, against our governments and bankers.

    capital controls, monopoly on the currency issuance etc. will soon be things of the past.


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