Falling Oil Prices will Cause Bank Failures and The Collapse of The Petrodollar👉 Subscribe to my Backup Channels : 👉
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Although The drop in oil prices is likely to be short-lived, the US shale oil industry is going to be hit the worst.
A lot of the heavily indebted energy companies are clearly going to go bankrupt.
50-60 dollars a barrel is kind of a minimum for a lot of these guys to survive. But it is the Banks that are expected to take the biggest hit for the oil price drop.
The fracking industry was an attempt to make money off of high oil prices by going into the ground in a new way and depleting other oil resources that the United States had.
The fracking companies, and here comes the big part; did not use their own money. They borrowed huge amounts of money from America's biggest banks to fund the enormous expense of setting up the infrastructure to pull that oil out of the ground. The problem is when the price of oil collapses the way it did yesterday, the fracking companies cannot generate enough income to repay the bank loans that are out and due from them. Everybody who's in this business knows that with the fracking company's going down with the 50% drop in their share values, you're looking at banks that are trembling right now. And that is going to have to call in other loans to other parts of our economy to cover the losses that they're experiencing as the fracking companies tell them we can't repay. Where this plays out, is who else will be hurt in this tumult.
Nobody knows, but the market is scared to death that it will be a general decline; and that what the Trump government will do will be too little
and too late.
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