The rise of a great power: starting with military industry

International crude oil prices and international natural gas prices have fallen sharply for three consecutive days.

As the saying goes, good fortune never comes alone, and misfortune never comes alone!
Just when everyone thought that international crude oil prices and international natural gas prices had hit bottom and were about to rebound.

China's 25 o'clock news broadcast a piece of news. The host of the o'clock news introduced in a festive tone that China National Petroleum Corporation has made a huge breakthrough in shale oil technology, reducing the cost of shale oil extraction to US$ per barrel.

As soon as the news came out, it shocked countries around the world, and also shocked the entire energy market!

Shale oil. Countries around the world that have rich shale oil reserves are all studying how to exploit it.

After all, oil is a non-renewable resource. The oil that is easy to extract now is probably enough for the world to consume for decades. In the future, we will inevitably have to extract shale oil that is difficult to extract.

However, the disadvantages of shale oil extraction are also very obvious, such as the difficulty of extraction, high extraction cost, environmental impact, and technical limitations.

It is precisely because shale oil extraction faces multiple challenges that the amount of shale oil extraction has not been high so far.

The United States has the highest shale oil production, with daily production of about 500 million barrels at a cost of up to $90 per barrel.

Of course, this cost includes a lot of upfront investment, such as purchasing land and so on.

This is also why the United States wants to raise international energy prices.

On the one hand, they can make money by controlling Iraqi oil and relying on Iraqi oil exports. On the other hand, they can develop shale oil and increase the scale of shale oil extraction.

However, in the face of China's revolution in shale oil technology, international crude oil and natural gas prices have once again suffered a heavy blow.

Even if a lot of funds want to prop up the prices of oil and natural gas and go long on oil and natural gas.

But there are also people who are shorting oil and gas, and the two sides are competing with each other.

Under the successive blows, more people stopped losses in time and became short sellers.

Liquidation!

Continuous liquidation!

It is not just the national crude oil and natural gas prices that have been hit hard. In the United States, shale oil extraction has become profitable due to the rise in oil prices, and the share prices of shale oil companies have continued to rise, or financing has become easier, but now the share prices have collapsed.

After all, the price of shale oil extraction is still very high!

Even without considering land and infrastructure, the maintenance cost of drilling alone is still as high as $50 per barrel.

When crude oil prices fall below $50 per barrel, shale oil extraction will become unprofitable.

It's cruel, but that's the world!

Whether it is industrial products or raw materials, the lower the cost, the more competitive it is.

What is triggered at this time is not just the decline in international crude oil and natural gas prices, but an economic crisis!

After all, if the long positions are liquidated, the lost funds will be in the scale of hundreds of billions of dollars!

With the loss of so much funds, many bulls will be affected.

A single move affects the whole body!

The economic crisis was originally something that everyone was trying to cover up, and the Federal Reserve has repeatedly denied that an economic crisis had broken out in the United States.

But now, I can’t hide it anymore even if I want to!

The head of the Federal Reserve and the U.S. Treasury Secretary, when interviewed by media reporters, both had to express regret and said that we are indeed facing a financial crisis.

Later, all European countries successively admitted that an economic crisis had indeed broken out and that they needed to unite and work together to overcome the difficulties.

Beijing, Siheyuan.

Liu Tao looked at the briefing prepared by his secretary, which seemed to be much faster.

After reading it, Liu Tao showed a satisfied look. The third fire had not even started yet, but only two fires had been lit, and the international crude oil and natural gas prices had collapsed directly.

Cut it in half directly!

The effects of these two fires were somewhat beyond Liu Tao's expectations.

Originally, he thought that it would take three fires to really crash the market.

In less than ten days, it completely collapsed.

And judging from the current situation, I am afraid that the prices of oil and natural gas will fall further.

Truly return to the market price where they should be.

Wherever there is an economic crisis, commodity trade is at a high level, which is completely unreasonable.

If the Americans want to loosen up their monetary policy, they will have to pay a price.

Quantitative easing, just four short words, reflects the irresponsibility of European and American countries, shifting the costs to developing countries.

This is not possible!

Since you dare to implement quantitative easing, you must experience the backlash of quantitative easing.

Liu Tao didn't know whether the European Five Pigs incident would happen again.

But he knew that European and American countries would definitely not have an easy time this time.

To be honest, the decline in oil and natural gas prices is beneficial to Europe, but Europe is too closely connected with the United States, and the US economic crisis will inevitably affect Europe.

Even Liu Tao didn't know how many companies Americans controlled in Europe.

After the economic crisis broke out in the United States, a large number of Americans inevitably withdrew their investments from Europe and returned home to tide over the difficulties.

As the saying goes, opportunities are opportunities, crises also have opportunities!
If Europe can seize the opportunity and use it to achieve economic autonomy, it would be a good thing for Europe.

For Europe, only if it has political independence, economic independence, and military independence, that is, becomes an independent sovereign state, can it truly become a true European Union, which is the European integration envisioned and pursued by Europeans.

Otherwise, it will be very difficult for Europeans to achieve European integration.

To be honest, from China's perspective, European integration is something that we welcome.

Because what China pursues is not hegemony, nor is it bipolar competition, but a multipolar world.

Europe has become a pole, which means that Europe and the United States are no longer a whole, but rather there are many individuals with different interests.

Liu Tao didn't know how big an impact this economic crisis would have.

He vaguely remembered that the economic crisis in the original time and space was called the most serious economic crisis in the world since the Great Depression of 1929.

The crisis led to the collapse of financial systems and credit markets in many countries, a sharp decline in international trade and investment, and the bankruptcy of many industrial and service companies.

The root causes summarized at the time could be traced back to several key factors, including the real estate bubble, lax credit standards, high-risk investments by financial institutions and the failure of the regulatory structure.

It was also during this crisis that classic sayings such as "too big to fail" were born.

The real estate bubble is reflected in the fact that under the influence of the real estate market bubble, financial institutions began to invest heavily in real estate, which led to excessive expansion of the real estate market and excessive increases in housing prices. Once the real estate market bubble burst, the balance sheets of financial institutions suffered huge losses, leading to the bankruptcy of financial institutions and serious problems in the credit market.

The loosening of credit standards is when in many countries financial institutions began to inject large amounts of money into the market by granting risky loans and improper credit. This loosening of credit standards led to excessive investment in risky bonds that could not be repaid due to their high risk. This led to serious problems in the balance sheets of financial institutions.

The high-risk investment of financial institutions is reflected in the fact that many financial institutions obtain high returns by investing in high-risk investment products. This behavior encourages financial institutions and other investors to invest in high-risk products, and high-risk investment is also one of the reasons for the serious problems in the balance sheets of financial institutions.

As for the failure of the regulatory authorities, there is no need to mention it, the criticism is simply speechless.

But no matter what, this crisis was caused by the Americans themselves, and this is the real root cause!
In the original time and space, the Americans passed the crisis on to the whole world, and then relied on China's help to overcome the difficulties, but ended up falling out with China. (End of this chapter)