Have been doing some thinking and reading of what the Venezuela thing means for markets.

Trying a longer form post for once. Let me know if I should post more like this rather than brain rot 1-2 one liners.

(Not so short) summary of my thoughts.

- US Spec Ops captured Maduro yesterday (sunday) us time from right out of the Venezuela capital. Today he has already been flown to New York and is being held and going to be charged for nacro terrorism (very serious)

- Maduro was widely unpopular, widely believed to have rigged and stolen the 2024 election. He was also unpopular with other South/Latin American leaders. No one is sorry to see him go

- Venezuela has HUUUUUUGE oil reserves. The largest in the world and most of it is heavy oil.

- The US has the world's most advanced (and largest) infrastructure for processing heavy oil. 70% of US oil refining capacity is built for heavy oil refining.

- It will take 12-24 months for Venezuela to start producing more oil again (much of current capacity is old and degraded) so this is not an immediate effect, but medium to longer term you can expect us oil prices to come down --> inflation down

In fact, if the markets start to expect increased oil supply --> futures will price in lower oil --> all prices with oil as an input (virtually all goods) will start to come down --> inflation starts to trend down even before the oil starts flowing.

Genius move by trump / bessent tbh.

Lower interest rates --> flood market with money (which is usually highly inflationary) --> but counter balance by bringing down energy costs.

floor market with money --> asset prices pump to valhalla (hopefully BTC too)

IT WAS AND WILL ALWAYS BE ALL ABOUT THE OIL.