WBH Energy, shale oil company in TX filed for bankruptcy today. Sadly, I believe that many other companies will follow. As I explained previously, Saudi Arabia enjoys the lowest cost of oil production at $17 per barrel. On the other hand, 70% of the US shale companies lose money if the cost of oil goes down below $60. Do the math.

Saudi Arabia already announced that they will not reduce production even at $20 per barrel.

What concerns me, is that this will be a domino effect. Trillions of dollars are invested in the oil and gas industry. If oil companies will be going down, we will see many other companies in support, construction and infrastructure industries going down. Furthermore, all of this shale exploration was not done on cash basis. I am sure, there were billions of dollars of loans taken out. If large customers default, how long do you think it will take for the banks to start defaulting, going bankrupt.

Now, let’s think, what might happen next? Will there be another bail out of the banks? Or considering the changes in Dodd-Frank, which were done in the middle of the night, will we see banks dumping more swaps, more derivatives, on the FDIC insured institutions, which means ultimately on us, the taxpayers?

Time and again we are seeing how corruption in our government and Congress destroys industry after industry. Remember steel making, aluminum, auto making, textile? How about solar panels not so long ago? Time and again we could save those industries by instituting tariffs, we could be prosperous, we could be the wealthiest nation in the world, yet we are now the biggest debtor in the world, staring at 18 trillion dollar debt and at least 140 trillion of unfunded obligations. 92.5 million adult Americans are not working, average family income and average family savings are plummeting. Yet nobody in Congress or the government is even talking about protecting the US industries, even industries essential for national security and national independence. Nobody is talking about tariffs. Crickets…

By Dr. Orly Taitz, ESQ

Deep Debt Keeps Oil Firms Pumping – WSJ