The television network Current TV was recently purchased by the international news outlet Al Jazeera. The transaction will leave $125 million in former vice-president Al Gore’s pocket. Gore, who is a green living advocate, ironically sold the company to a news outlet owned by Qatar – an oil rich country.
Archive for the ‘Oil’ Category
By Sari Horwitz
Adults in Washington state will be able to smoke marijuana legally when it is officially decriminalized Thursday, even though the Justice Department has offered no guidance on the conflict with federal drug laws.
Prosecutors throughout the state have begun dismissing hundreds of misdemeanor marijuana cases, according to authorities there, and state and local police are being retrained to arrest drivers who are high and allow adults to light up in their homes.
Marijuana, however, is still illegal under federal law. State officials say the Justice Department is creating confusion by remaining silent about what steps it may take in Washington and Colorado, which passed initiatives in November legalizing the manufacturing, distribution and possession of up to an ounce of marijuana.
Washington Gov. Chris Gregoire (D) met with Deputy Attorney General James Cole at the Justice Department, but came away with no answers.
“They said they were reviewing it,” Gregoire’s spokesman, Cory Curtis, said Friday. “They didn’t give us a timeline when they would provide clarity.”
After his state approved the initiative, Colorado Gov. John Hickenlooper (D) called Attorney General Eric H. Holder Jr. and wrote him a letter asking for guidance about how the federal government will react to the state’s new law.
“We need to know whether the federal government will take legal action to block the implementation of Amendment 64, or whether it will seek to prosecute grow and retail operations,” Hickenlooper wrote.
He also asked Holder if Justice will prosecute Colorado state employees who regulate and oversee the growing and distribution of marijuana.
“We find no clear guidance on these issues in memoranda or statements previously issued by the DOJ,” Hickenlooper wrote.
Like their counterparts in Washington, Colorado prosecutors have begun throwing out hundreds of misdemeanor marijuana cases.
Holder has not responded to Hickenlooper’s Nov. 13 letter. Justice spokeswoman Nanda Chitre said the letter is “still under review.”…
21st Century Wire
As the global energy game moves into the 21st century, the curtain is beginning with move back, unveiling the true nature of certain international organisations. The implications of this apocalypse should change to way we look at these institutions.
This year’s World Energy Outlook from the International Atomic Energy Agency (IEA), released in November, went further with the two policy obsessions of the IEA, described as “not very fashionable” by the IEA’s Turkish-born chief economist Fatih Birol in a November 15 interview with European Energy Review.
These “new and unfashionable” policy quests are: energy for all at an affordable price; and the struggle to prevent CO2 levels in the atmosphere exceeding 450 ppm (parts per million) by the 2035-2045 period.
The IEA quickly redefines the keyword terms: energy for all means, in particular, oil supplies for the 28 exclusively OECD member countries in the IEA: the IEA’s foundation in November 1974, after the first Oil Shock, by Richard Nixon and Henry Kissinger, laid down the IEA’s mandate of acting to ensure oil supply security for the OECD, and “affordable priced” oil.
For Nixon and Kissinger, the IEA was a second-best. Their original goal was to invade and occupy Saudi Arabia and ensure the free flow of cheap oil, Iraq-style. Their IEA was therefore set as an organization able to confront the Arab oil exporters using guile rather than force, by playing one exporter off against another with a range of different contract types, building up stocks of oil in the OECD countries, and forcing down oil prices.
This has nothing to do with the IEA’s new struggle against global warming – assuming, for starters, that global warming really exists, and is due to human emissions of CO2 from burning fossil fuels – especially coal, not oil. This new obsession of the IEA has however grown to become its single most important policy theme for advising energy ministries and government deciders in the OECD. And “fighting climate change”, according to the IEA is vital and obligatory.
The struggle needs higher energy prices, carbon taxes, emissions trading, carbon offsets and everything we now associate with “carbon finance”. The IEA’s goal for a “sustainable energy future”, and its related goal of “an efficient energy world” by about 2035 are costed by observers (and by the IEA itself) as anywhere up to $45 – $50 trillion in dollars of 2012 value.
Paying for that needs high-priced energy. The IEA is therefore a “price hawk” for oil. This year’s WEO repeats the IEA’s scenario forecast that by 2017 year average oil prices could attain $175 per barrel. We can change the “could” to “should” after reading this year’s WEO.
BACK TO GLOBAL WARMING
Incredible as it can seem to many, freshly re-elected Barack Obama is giving serious thought and attention to banning, or limiting – or taxing – oil and gas extraction by hydraulic fracturing. One part of Obama’s rationale for this is the “possible GHG (green house gas) release from fracking”. Another is a lot more down to earth. Passing a new energy tax, called a carbon tax, in the USA could garner $100 billion in tax revenues for the Federal government in its first year of operation. Cross party support to a carbon tax is growing rapidly in Congress. The extreme low price of gas in the US, due to fracking, provides an easy tax base for adding a new Federal tax and new State taxes.
In the US and soon worldwide, “fracking” has had and will have revolutionary effects on gas supply and gas prices. The drilling process has brought U.S. energy independence within reach – with the important rider that for now rapidly growing shale oil production, this needs $100 a barrel prices.
Some US oil and gas industry leaders remain enthusiastic but cautious that fracking will be fully endorsed by newly re-elected President Obama and by the majority of US state leaders, but this apparent full or majority industry support is belied by the damage to US energy corporation fortunes already produced by “overcheap” natural gas. There is almost no prospect of natural gas prices, in the US, even attaining one-half of gas prices in Europe and Asia. Gas industry hopes, at present, are that the US will have a cold winter, following a hot summer, and this may boost gas prices to around $5 per million BTU, about one-third of European and Asian prices, which prices gas energy in the US at $29 per barrel of oil equivalent. Oil prices still hover around $110 per barrel for Brent.
Open endorsement of fracking from Mr. Obama and state leaders would make fracking the cornerstone of US energy policy for decades to come. Conversely, if for any reason Obama distances himself from fracking, takes a more cautious and pro-environmental line, argues that fracking has a high climate change impact, and is a “disruptive technology” we may expect major changes – in particular a rise of gas prices in the US. The energy price factor is critical, and for Obama the subject of US natural gas has two tax-grubbing opportunity windows: either tax fracking, that is gas production; or tax gas with a carbon tax “to save the climate”, that is gas consumption. The huge difference between oil prices, on one hand, and gas prices on the other show the size of the tax-raising opportunity in the US.
The economic case for fracking is massive. This year’s WEO report however takes a studiedly neutral line on fracking, which reflects the huge range of opinions, in energy ministries of the OECD countries on this subject. US energy sector leaders, and their political friends in both main parties, have now eased off on the “energy independence” claim for fracking. They are now, more than ever, portraying domestic oil and gas production as a key way of generating tax revenues, spurring job creation in “repatriated industries”, cutting the trade deficit and saving the nation from going off the “fiscal cliff.”
The IEA faithfully reflects this emerging realworld consensus of the political elites. World energy prices should be moved up, not down, “to save the planet”, or at least increase state tax revenues and fight the burden of sovereign debt. Keeping oil prices high, worldwide, and keeping gas prices high, outside the US, are easily made conclusions on the IEA’s main policy advise, from this year’s WEO.
WHY HIGH PRICES: THE INDUSTRY ANGLE
The extreme difference between the case for US shale oil production, by fracking, and natural gas production, by fracking, is very simple to explain. US shale oil producers need high oil prices to “keep on frackin”, and claim to believe that oil prices “will not significantly decline” from curent levels around $100 a barrel. Conversely, US gas prices are the lowest since 1992 and set to stay that way. Gas fracking, in the US, has been too successful. Whatever US gas producers, like Chesapeake Corp or Exxon’s gas subsidiary XTO Energy want, it is not cheap gas.
Fiscal cliff reasoning is that tax reform, to be sure, is vital but the US cannot tax its way out of the crisis. Also, there is no way that savings can rise, the US cannot save its way off the cliff. Chasing growth is fine, but the US cannot rapidly grow its way out of the crisis. The alternate and providential way to make recovery feasible, is domestic energy. As the CEO of the US Chamber of Commerce, Karen A. Harbert, has said: “Every dollar that we generate from energy is a dollar that we don’t have to take out of the Defense Department, the entitlement area, or increase taxes, or send overseas.”
Official optimism that Obama and the White House will recognize that remains high. While many Republicans and some energy industry leaders have doubted his sincerity, Mr. Obama’s campaign voiced strong support for expanded oil and gas drilling throughout his race against Mitt Romney.
The IEA has played its own role by recently predicting that the US will become the world’s largest oil producer by about 2020, overtaking Saudi Arabia and putting the nation on course to be energy self-sufficient by 2030. Due to fracking, US natural gas output has risen by about 25% since 2007, removing any possible outlook of scarcity. Shale oil could or might do the same thing – but only if oil prices stay high.
This new energy reality puts pressure on the Obama administration to fully embrace fracking and avoid taking steps that could hamper it, many analysts conclude. Maintaining high and rising gas output, and bargain basement US gas prices, creates a huge tax window of opportunity. For oil, the situation is a lot more complex, but the goal of increasing US shale oil output sorely needs high-priced oil. Despite some major States – specially New York and California – remaining equivocal on allowing fracking, state level support to fracking has certainly continued to grow.
SQUARING THE CIRCLE
The probable or possible solution, for Obama and for other OECD country leaderships facing the same dilemma, is already on offer from the IEA, in this year’s WEO.
The IEA’s prediction the US can overtake Saudi Arabia by its oil production, due to shale oil, makes little reference to the oil price background for this forecast. The IEA’s commitment to a high-priced oil future is however clear – very few IEA scenarios give an outlook of oil prices declining below about $75 a barrel. Many IEA forecasts paint a picture of year average oil prices hitting as much as $175 a barrel by 2017. This uear’s WEO repeats the IEA forecast of a year average $215 per barrel by 2030. The IEA may be studiedly neutral on fracking, but its oil price outlook is high, very high.
Almost never given coverage in IEA reports and studies, high oil prices are now treated by the IEA as a major long-term – in fact permanent – part of the global energy scene. For national administrations like Obama’s, high oil prices and high turnover and profits for oil producing companies and corporations also have a simple bottom line: high taxation revenue potentials. The European example – several times cited by Steven Chu early on in his job as US Energy secretary – is that car drivers can be forced to pay $8.50 – $9 per US gallon for their fuel (around $378 per barrel), of which as much as 65% goes to the State as oil taxes. The high profits garnered by European oil companies on their home turfs, also generate large State tax revenues, despite the corporate tax hedging and evasion.
To be sure, “high gas(oline) prices” in the US are a politically sensitive subject, as Chu quickly realised, but little by little, US motorists are learning to think in small litres, not big gallons, and pay more for their fuel. Obama’s renewed “personal conviction” that the world faces a crisis of anthropogenic global warming, the recent hot summer, and hurricane Sandy, both in the US, all play strong supporting roles in the elite quest to raise energy prices – and taxes.
The bad example of fracking – slaying US natural gas prices and making major gas companies unable to pay taxes, or even stay in business – can be prevented from “migrating” to oil and killing the Golden Goose of high oil prices. For this to happen, Obama has to act to prevent oil prices eroding too far. Taxing shale oil fracking “to save the planet” is a certainly possible candidate, for his administration’s fiscal cliff-oriented endorsement of fracking and higher gas prices in the US would make the stark, even ridiculous difference between oil prices, and gas prices, less massive.
The IEA certainly hopes so and stolidly continues to forecast high oil prices.
The two top-ranking BP supervisors on the Deepwater Horizon drilling rig — Robert M. Kaluza, 62, of Henderson, Nev., and Donald J. Vidrine, 65, of Lafayette, La. — were indicted on 23 counts, including involuntary and seaman’s manslaughter, for allegedly ignoring warning signs of the blowout that set fire to the rig, which later sank.
A separate indictment accused David Rainey, a former BP vice president, of hiding information from Congress and lying to law enforcement officials by understating the rate at which oil was gushing into the Gulf of Mexico. Rainey, 58, was BP’s deputy incident commander and BP’s second-highest-ranking representative at the Coast Guard’s unified command for the spill response.
“Make no mistake: While the company is guilty, individuals committed these crimes,” said Assistant Attorney General Lanny A. Breuer, head of the criminal division. Of the two rig supervisors, Breuer said, “In the face of glaring red flags indicating that the well was not secure, both men allegedly failed to take appropriate action to prevent the blowout.”
Attorneys for the men said they will fight the charges.
Separately, the London-based oil giant will pay $525 million over three years to settle claims with the Securities and Exchange Commission, which said the firm concealed information from investors. The settlement is subject to U.S. federal court approval.
BP said it would increase its existing $38.1 billion charge against earnings for the spill by $3.85 billion.
BP and the Justice Department failed to agree on a separate settlement of federal civil claims, including federal and state claims of damages to natural resources. BP said it is “prepared to vigorously defend itself against remaining civil claims.” Clean Water Act fines alone could total $5 billion to nearly $20 billion, depending on whether BP is found to be guilty of gross negligence or willful misconduct.
But the settlement resolves all criminal charges. BP agreed to plead guilty to 11 felony counts of “misconduct or neglect of ships’ officers.” Jane Barrett, an environmental law professor at the University of Maryland, said the seaman’s manslaughter statute, first passed in 1838 in response to steamboat accidents, has a lower threshold for guilt including “misconduct, negligence or inattention to duties.”
Let’s compare Syria’s Assad to some of the ‘statesmen’ currently trying to overthrow his government through their Orwellian-esque named, “The Friends of Syria” project…
RT interviewed Syrian President Bashar Al Assad this week, and by all accounts, Assad came off as intelligent, sensitive and above all, as a statesmen. We may not agree with all of his policies, but non-psychopaths living in the west can all agree that Washington and London’s plan to flood Syria with terrorists and destroy it from within – is not a civilised way to go.
Alright, let’s compare the calibre of leadership. First, here’s the Syrian leader – showing admirable restraint in the face of criminal intervention by West and Gulf States. He was, by all accounts – impressive, to say the least…
As his people are being brutally butchered by the West’s proxies and mercenaries in Syria, here’s US Secretary of State, Hillary Clinton, showing the calibre of leadership we are left with in the west…
The reason Hillary finds all this such a lark, is that she has more important things to consider – namely, her celebrity aspirations…
…and she want to be President in 2016. It would be better if she became host of The View.
Now for David Cameron. How does statesman Cameron stack up against Syria’s Assad in terms of leadership, brains and pure toughness? The British PM supports FSA and al Qaida terrorists in Syria with guns and military intelligence, but when it comes to Britain itself, he’s keeping himself busy covering for paedophiles and child abusers at the heart of the British Establishment. The thought of a “gay witch-hunt” in Westminster made the PM turn yellow. Could be handle Assad’s workload then? How does Cameron stack up? You decide:
And finally, we have the British Foreign Secretary, William Hague, allegedly he is a ‘straight’ politician, so shouldn’t have to worry about David Cameron’s ‘gay witch-hunt’. Here’s a photo that should inspire international confidence…
There he is with Savile!
And they call themselves “Friends of Syria’, well, well.
It’s times like these, when you have to really feel like the world has been turned upside down.
BEN FELLOWS: TORY GAME OF THRONES – KENNETH CLARKE INTRODUCED NICK BOLES AT BILDERBERG – IS HE THE NEXT TORY PARTY LEADER?November 9, 2012
21st Century Wire
Here’s how it’s played out: David Cameron got ‘carried away’ with ‘fluffy’ issues after becoming Tory leader, neglecting voters’ key concerns, one of his closest advisers said last night after getting the phone call from his Bilderberg masters.
It might be a surprise to members of the public why Planning Minister Nick Boles is suddenly coming out – in a bid to oust David Cameron as party leader; as Mr Cameron struggles to get to grips with the complex issue of paedophiles within politics.
The Planning Minister said the modernisers who seized control of the party in 2005 had become ‘overly obsessed’ with impressing Oxbridge-educated professionals while neglecting Britain’s ‘hard-working strivers’. Isn’t that just what the doctor ordered, someone who appears to speak utter sense making the British public feel that at least this guy gets it, but does he? Or was he told what to say in a private conversation with Bilderbergers last night and given the green light to begin the coup on the Tory Party leadership after Cameron’s latest “gay” paedophile gaffe with Philip Schofield on live national TV?
And by the way, Mr Cameron, what exactly did you mean by a “gay” witch-hunt in Whitehall?
Just for the record – being gay does not mean you are a paedophile. You cannot equate that depraved behaviour with homosexuality. Perhaps someone should tell this to the Cabinet Office and Prime Minister David Cameron after the Cabinet Office wrote to blogs in the past couple of weeks threatening to sue over my allegations.
My accusations involving an incident where *********************(redacted) Ian Greer’s office – are matter of fact, as far as I’m concerned. Yet, the Cabinet Office saw fit to send emails to blogs protesting that ********(redacted) ‘wasn’t gay, so therefore he couldn’t be a paedophile’. To be clear, I have never accused any government minister of being gay – I could not care less about his or any other person’s sexuality. But I did make accusations of gross misconduct. This just demonstrates the government’s general ignorant belief that to be a paedophile you have to be gay, which of course, simply diluting the debate by introducing the gay card – in order to escape the reality that paedphilia is a social disease which afflicts all sectors – as well as straight men and women. Shame on you all!
What’s coming for David Cameron, as if he didn’t know, and sooner than he could have imagined is a vote of “No Confidence” within the Tory Party. David Cameron like Margaret Thatcher before him will be replaced – but by whom?
Clearly it’s now time for Nick Boles to come forward as the next government leader after attending the Bilderberg Meeting this year introduced by Minister Without Portfolio Kenneth Clarke.
Kenneth Clarke is a senior Bilderberg member and attends on a regular basis introducing the next Prime Minister or party leader. Reports from within Bilderberg say that new leaders are introduced to the cartel by having to serve high profile members drinks, as well as open doors etc. Both Bill Clinton and Tony Blair were summoned to attend in this capacity before they were anointed by their respective parties to lead. David Cameron attended before his premiership as it seems to be part of the grooming process. To be accepted you need to demonstrate that you are willing to humiliate yourself in front of people like luminaries like Henry Kissenger et al.
The Jimmy Savile paedophile abuse scandal, the Lord McAlpine incident, and the rest, seems to be proving too much for David Cameron – and after his latest ‘all paedophiles are gay’ gaffe on ITV yesterday – it looks like enter stage left… for Nick Boles, right on cue.
Question: do we really want to be led by anyone who attends clandestine meetings with the world’s power brokers who decide ours and the world’s fate each year – laid out in the annual Bilderberg agenda? From orchestrating the economic global collapse, to the depopulation – in order to save the planet (of course), or inching the west towards a World War 3 situation. Bilderberg does it all, in the name of progress, moving us ever closer towards a global, One World Government, which they themselves often refer to as, The New World Order.
What is all this Bilderberg nonsense about?
Bilderberg takes its name from the hotel in Holland where the first meeting took place in May 1954. That pioneering meeting grew out of the concern expressed by leading citizens on both sides of the Atlantic that Western Europe and North America were not working together as closely as they should on common problems of critical importance. It was felt that regular, off-the-record discussions would help create a better understanding of the complex forces and major trends affecting western nations in the difficult post-war period. Sounds good right? No, for example it is illegal for American politicians to attend as it violates what is called the Logan Act.
The Logan Act is a United States federal law that forbids unauthorised citizens from negotiating with foreign governments. It was passed in 1799 and last amended in 1994. Violation of the Logan Act is a felony punishable under federal law with imprisonment of up to three years. However, no one who attends from the United States government ever gets arrested; just journalists and protesters who stand in the cold attempting to hold to account world’s politicians and expose this most vile of world institutions.
The Bilderbergers are people who say they are helping humanity just so they can make billions. They appear in the shadows, as arrogant as Lucifer and no more sympathetic than he is towards mankind. They live under the “golden rule” – whoever has the gold makes the rules. Rockefeller himself admitted they are conspiring against the best interests of the Unites States to form a one world government. A surveillance led global totalitarian regime which is a mixture of fascism and communism rolled into one.
The Bilderberg Group is much more than just a social club. It has played a major role in shaping the direction of the world since it was created in 1954. The Bilderberg Group created the European Union and the euro. This year efforts to save the euro are rumoured to be high on the agenda.
Past Bilderberg attendees have included Bill Clinton, George H.W. Bush, Prince Charles, David Cameron, Tony Blair, Henry Kissinger, Bill Gates, Angela Merkel, Ben Bernanke, Timothy Geithner, Rick Perry, David Rockefeller, Herman van Rompuy, Jean-Claude Trichet, Jeff Bezos, Chris R. Hughes, Eric Schmidt, Craig J. Mundie, Anders Fogh Rasmussen, Richard Perle, Paul Volcker, Lawrence Summers, Hillary Clinton and Joe Biden.
This year they welcomed all the way from the United Kingdom to Chantilly Virginia, where this Lord Peter Mandelson, John Micklethwait – editor and chief of the Economist, Gideon Rachman from the Financial Times, Martin H. Wolf from the Financial Times, Peter Voser – CEO Royal Dutch Shell Plc, Marcus Agius – Chairman Barclays Plc and former BBC Trust Board of Directors, Kenneth Clarke – Cabinet Minister without portfolio and, drum role please… future Tory Party leader Nick Boles.
David Cameron could well do an IDS, and be ousted very soon for Nick Boles to take over the Tory party leadership.
Will it be Boles?? Just remember, you heard it here first.
CARACAS, Venezuela — Fighting for his political life, President Hugo Chavez overcame a vigorous challenge by Henrique Capriles in Sunday’s presidential election, receiving another six-year term that will give the populist firebrand the opportunity to complete the consolidation of what he calls 21st century socialism in one of the world’s great oil powers.
The victory, announced by the National Electoral Council late Sunday, gave Chavez the win with 54.4 percent of the vote, while Capriles took 44.9 percent. In winning his fourth presidential election since 1998, Chavez captured just over 7.4 million votes to 6.1 million for his adversary, turning back what had been a determined battle by Capriles, a 40-year-old former governor.
“I congratulate the opposition and the directors of the opposition, because they recognize the victory of the people,” Chavez told throngs of supporters gathered outside the presidential palace. “That’s why I send them this salute and put out my arms to them, because we are all brothers in the fatherland of Bolivar.”
Half an hour later, Capriles conceded at his campaign headquarters. But he signaled that the support of millions of Venezuelans showed that his proposals had struck a chord. And he asked that Chavez, who often mocks his foes as oligarchs and lackeys of U.S. imperialism, take the opposition’s needs into account.
“I’m convinced that this country can be better,” Capriles said in a halting, emotional speech. “Being a good president means working for all Venezuelans.”
Chavez’s victory touched off wild celebrations in the capital, where crowds of the president’s red-shirted supporters — the “Chavistas” from the poorest barrios who have been the backbone of his movement — set off fireworks and blew horns.
“You can’t do better than this president,” said Miguel Guevara, 77, who sells books in the streets and voted in a poor barrio whose support helped bring Chavez to power. “The only one who has helped the country is named Hugo Chavez.”
The president of the electoral council, Tibisay Lucena, said more than 80 percent of the country’s nearly 19 million registered voters participated in the election.
“To the participants who didn’t get victory, consider yourselves victors, too,” she said in making her announcement to loud cheers among Chavez’s supporters. “To participate in an electoral process like this one, in democracy, is a victory for the whole people of Venezuela. The entire country has won.”
Chavez still faces a host of challenges that were highlighted by Capriles’s focused, well-organized campaign, in which the youthful lawyer — known as “Skinny” to his followers — hammered the government daily for the country’s decaying infrastructure, increasing dependence on oil exports and inability to control one of the world’s highest homicide rates.
Dark times lie ahead for the U.S. dollar as its future as the world’s reserve currency looks to be in great jeopardy. For more than 50 years the U.S. dollar has been the chief monetary instrument used by the nations of the world to facilitate trade involving commodities such as petroleum, manufactured products, and gold. But the times are changing and many of these nations, with China at the forefront, are finalizing trade agreements that utilize only their own currencies.
So it appears that the reign of the U.S. dollar as the world’s reserve currency will, quite likely, be coming to an end within the next ten years. It is certainly no surprise that China, widely considered to be the premier economic power of the future, is wasting no time in exerting its growing power and influence in these matters. China is actively working with nations in Asia, the Middle East and other regions of the world to bring dramatic changes to the way world commerce is conducted and money is exchanged.Many of these countries who are moving away from the dollar no longer view America as a stable and reliable force on the world economic stage and they are seeking alternatives as a hedge against a severe future decline in the dollar’s value.That China is the main facilitator of these moves to do away with the dollar is without question; the evidence is everywhere. Here are some specific examples of the various agreements that have been between China and other nations in recent times:*China and Iran are creating a barter system by which Iranian oil will be exchanged for Chinese imported products. This is, quite obviously, an agreement designed to counter U.S. sanctions against Iran since China has no intention of discontinuing the importation of Iranian oil. Besides the barter system the two countries will also conduct trade using the Chinese yuan, the Iranian rial and gold.*China and Japan announced plans to bypass the dollar and use their own currencies in their trade relations. Discussions involving a partnership between South Korea and China to exchange their currencies also have taken place. This is a huge development as China, Japan and South Korea are the dominant economic powers in that Asian region.
China and Russia have, for more than a year, been conducting trade using rubles and the yuan.
China and the United Arab Emirates (UAE) have announced an agreement which will use the yuan for oil trades. The Chinese National Bank said that this agreement, worth around $5.5 billion, was made to “strengthen financial cooperation, to promote trade and investments, and to mutually assure regional financial stability.”
*Russia and Iran have agreed to use rubles as a means of currency in their trades. Russia has joined China in opposing U.S. sanctions against Iran and fully intends to maintain a close relationship with Iran.
*China will pursue bilateral trades with Russia and Malaysia using the yuan, the ruble and the ringgit, respectively.
*The nations comprising the BRICS group (Brazil, Russia, India, China and South Africa) recently agreed at their summit meeting in Sanya, China, to establish mutual lines of credit in local currencies. This, again, is a very significant development since this group of nations represents a very powerful economic bloc going into the future.
*The United Nations Conference on Trade and Development has stated that “the current system of currencies and capital rules which binds the world economy is not working properly and was largely responsible for the financial and economic crises.” Further that “the dollar should be replaced with a global currency.”
*The International Monetary Fund (IMF) recently issued a statement about replacing the dollar as the world’s reserve currency with a system of Special Drawing Rights called SDR’s, an international type of currency created in 1969 which is, in effect, a “basket of national currencies” backed by the full faith and credit of the member countries’ governments.
It seems like everyone is jumping on the bandwagon to do away with the dollar as the reserve currency. This could be termed as “payback time” as many countries that either have lost respect for America, or who fear its military outreach, have found a way to combat physical force with economic power. That may well be the case when we consider that this movement is being strongly promoted by China, Russia, and Iran, no real friends of the U.S.
When the dollar is no longer the world’s reserve currency the effects on America will be very severe. It will have monumental negative effects on the economy and its ability to conduct trade with other nations. In many cases nations will simply stop using the dollar. In other cases they may use the dollar but only at heavily discounted rates. Such actions will cause the Fed to run the Treasury Dept. printing presses non-stop, creating massive inflation and making the dollar the modern-day version of Fiat Money.
And yet, in every dark cloud there is a silver lining. If the dollar loses world favor, if it is severely devalued, there will be an opportunity for the government and the business community to take advantage by working together to rebuild American manufacturing, since exports to other countries will be at much lower prices. When that time comes we’ll see if each of them has the capacity to respond to the changing times and the new opportunities.
The demise of the dollar will also bring radical changes to the American lifestyle. When this economic tsunami hits America, it will make the 2008 recession and its aftermath look like no more than a slight bump in the road. It will bring very undesirable changes to the American lifestyle through massive inflation, high interest rates on mortgages and cars, and substantial increases in the cost of food, clothing and gasoline; it will have a detrimental effect on every aspect of our lives.
Such a revolutionary event in the world’s reserve currency poses a far greater threat to America’s security than any of those many fabricated terrorists that the Washington-based facilitators of war have created to keep the American people in a state of fear. This is a real threat and danger that America will be powerless to defeat with any form of military might. This will be a battle involving economic survival.
The U.S. government obviously can see what is going on, how these nations are rapidly moving away from the dollar. But is it doing anything to respond to the challenge? Time and time again this nation’s dysfunctional government has been warned that it is going in the wrong direction and must change course. It has been warned that it must stop pouring hundreds of billions and trillions of dollars into its war machine and downscale it vast worldwide military empire; it has not heeded those warnings.
This government knows that it is imperative that it significantly reduces its monumental national debt, that is must take steps to restore its manufacturing sector and rehire its workers, the foundation of America’s economy. But the corrupted politicians who answer only to the dictates of Corporate America have refused to respond to those warnings and they continue to follow a course that will eventually lead to financial insolvency.
And now time is running out for the U.S. dollar as the world community of nations has seen enough of America’s incapability in dealing with its most critical problems. It has now become evident that many of the nations of the world no longer have faith or confidence in either the U.S. dollar or in America itself.
|The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.|
What price Freedom? WE must take up Arms in Defense of the Innocent. This Evil Cabal, which includes DC, intends to destroy you, me and everything beautiful and sacred thing left on this planet! If you think that the 2012 election is the answer then, you are still completely asleep. If you think that your world will continue on in tranquility, you are deluded. Please, please Wake-Up, please! Time is very short.
By Patrick Henningsen
21st Century Wire
January 11, 2012
On the surface, the latest spat between the West and Iran looks like a step closer to war, with tensions reaching a fever pitch on both sides of this potential conflict. Upon closer examination however, present conditions are not particularly ideal for a preemptive strike against Iran by the US and Israel. There is still much money to be made from the current crisis – on both sides, before the winds of war could be unleashed on the region.
Military posturing by the United States and Israel near the Strait of Hormuz reached a new level this week with announcement of Austere Challenge 12, a naval drill which looks designed to apply increased pressure on Iran to abandon their alleged nuclear weapons ambitions. At the same time, Iran has announced it will be shoring up its defensive positions by conducting its own war games in neighboring waters. From a military standpoint, exactly how far and how fast these tensions escalate is still uncertain. There have been a number of key indicators though in the last week that hint at a longer, drawn out affair.
Real military conflict not looking favourable
Unlike Iraq or Afghanistan – two countries which offered little or no real military resistance when attacked by the US, Iran actually has the means to fight back and sustain its defensive position, as well as retaliate regionally, over a long period of time. The first target would be any US naval vessels parked or patrolling regional waters. Such a scenario may lead to a multi-regional World War III condition, and without a doubt, will be hugely unpopular in the West, plunging a global economy into a worldwide depression.
In addition, the US and Israel have yet to secure Syria and eliminate the military might of loyal Iranian allies Hezbollah in Lebanon – which must be done in order for the US and Israel to gain the upper hand regionally. Both these points are key factors in achieving a green light for any preemptive strike against Tehran, and both those lights are currently red.
Most experts are also in agreement that any serious clash between the West and Iran could result in a disruption in the flow of oil to a petroleum-dependent global economy that surely needs it now – more than ever.
These stark realities could be pushing the current standoff closer towards a stalemate, than towards the hot conflict that many mainstream media analysts are expecting to take place between now and spring 2012.
Signals from traditional US military and ‘coalition’ ally Great Britain are also not looking great. Addressing a recent conference entitled, “NATO and the Case for Collective Defense in the 21st Century” at Atlantic Council in Washington, the UK’s Defense Secretary Philip Hammond clearly noted, “We would not be in favor of a preemptive strike on Iran.”
Sanctions will not isolate Iran for long
US-led calls for economic sanctions against Iran may partially isolate Iran politically in the short-term, but they do not have the teeth to sustain enough severe pressure over the long run.
Already this week, South Korea announced that it will still be buying Iranian crude oil in 2012. China is also defying the US call for sanctions, stating its plans to make Iran its second largest oil importer in 2012. In addition to these, another trading partner of Iran – Japan, is expecting to receive an exemption from US penalties on Japanese banks doing business with Iran. “We are not considering banning imports,” Japan Times quoted a Japanese Foreign Ministry late last week.
Major oil companies are also represented throughout America’s elite clique of foreign policy think tanks, and like their corporate siblings in the defense industry, they will also reap huge dividends from the appearance of instability and crisis around the Persian Gulf. Such a ‘strategy of tension’ normally sees winners in those industries which are best placed to benefit.
Unlike the steady dollar slide between 2007-2008 which help drive the oil price spike of over $140 per barrel during the summer of 2008, this week’s oil highs of over $100 per barrel are a direct result of the present war-hype and threats of escalation. This will result in an overnight bumper economy for many of the OPEC petrol nations, as well as the major US oil distribution and retail corporations.
A New Cold War is emerging
The West’s last real military standoff was against the former Soviet bloc which came to a political finale in 1991 following the disintegration of the Iron Curtain. It was the world largest-ever arms race, fueled by 20th Century power politics, played out in the form of a Cold War.
The real winners of this long Cold War between the West and the Soviet bloc were those military defense contractors who became incredibly wealthy and influential as a result of decades of 20th Century global power politics. Their influence remains to this day and already, a handful of companies have reaped incredible rewards from the current protracted diplomatic deadlock with Iran. It is little wonder that some of these same corporations actually dictate most US foreign policy to a large degree, through their own CEO’s and board members that also belong to the dominant US-UK foreign policy think tanks including the Council on Foreign Relations, Chatham House and the Atlantic Council who then dictate their international policy recommendations to Washington and London, whose governments finally adopt these as official foreign policy. Their names include Lockheed Martin, General Electric, Raytheon, Boeing and others.
As the threat of a regional confrontation with Iran continues to drag itself out, the trend of profitability looks likely to continue as most of the West’s regional partners continue to both re-arm and upgrade their own defense systems – with US-made hardware.
The Arab GCC countries like Saudi Arabia, the UAE, Qatar and Kuwait have already begun their process of re-arming. In December 2011, the United States announced a $3.48 billion arms deal with the UAE, which included state-of-the-art THAD missile defense systems, as part of a wider American effort to build up missile defenses among Gulf allies to counter Iran. On December 29, the White House announced that it was sending nearly $30 billion worth of F-15 fighter jets to Saudi Arabia, part of a $60 billion package – the largest arms deal in history.
In addition, the US and Saudi Arabia signed a $1.7 billion deal earlier in 2011 to boost their Patriot missile batteries, and Kuwait put in their order to purchase 209 GEM-T missiles – at a cost of $900 million. These regional missile defense strategies will also need land-based interceptors to knock out incoming missiles, backed up by a detection network… aboard a group of US Navy Aegis-class warships. By the time this current round of re-arming is complete, US defense contractors will have seen a rise in profits which also means a rise in their all-important share prices.
Still, despite all these significant acquisitions on the part of the GCC so far, by no means do they provide blanket protection from an Iranian retaliatory strike against the Arabian Western allies. They are simply the latest chapter in that time-honoured tradition of Washington stoking regional tension on one hand, and America’s arms industry bleeding the Arab states of hard cash for still more expensive military hardware on the other. The Arabs can naturally afford to pay for their new military hardware from a sustained surge in world oil prices…. caused by the continued hyping of a potential military confrontation which could block the oil industry’s most key transit waterway – the Strait of Hormuz. One can see the geopolitical relationship between these events happening right now.
Here we have the ideal set of conditions for a New Cold War to emerge in the early 21st Century – one where the Western Axis powers of the US, Europe, Israel and the Emirates sit on one side, and Iran, Syria, China, Russia sit on the other. This Cold War will be more about sub-regional dominance in terms of economics – natural gas, mineral and trade relationships, than it will about the political ideologies that seemed to dominate the infamous 20th Century face-off.
How long this current stalemate drags on is anyone’s guess right now, but one thing is for sure – while it continues to brew, there are still massive profits to be made by key players in both the global defense and petroleum industries.