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.
Posts Tagged ‘Oil’
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.”
21st Century Wire’s Patrick Henningsen explains why the current war plan being decided in Washington and Whitehall is half-baked and not in the public interest at all, and why it will cause many meaningless deaths, and also trigger a global economic depression:
21st Century Wire
For the Libya war and regime change, things seemed straightforward: Libya is a big supplier of oil and gas to Europe.
Quickly replacing the Gaddafi regime was necessary, despite “the Colonel” being recycled back into grace with a Condoleeza Rice, Tony Blair and Silvio Berlusconi smile and handshake, only a few years before.
Once corporate penetration was underway, western central planners quickly replaced Gaddafi with a Shariah-proclaiming shaky government and its fundamentalist militias, who celebrated Sept 11th 2012 in a special way, by killing the US ambassador and staff in manner mirroring the demise of the late Colonel. But hydrocarbon supplies are vital!
On to Syria
Syria is a very minor exporter of oil (about 0.14 Mbd or 0.27% of world export supplies), with its exportable surplus on a slow downhill for more than 10 years. Kurdish separatists operating in and partly controlling eastern Syria have big plans to raise oil output, but their longstanding war with the el-Assad regime has blighted foreign drilling and related oil E&P activity. Most major oil investors (especially Canadian and Indian) have been tapering down their eastern Syria E&P for more than 3 years, since 2008-2009. Conventional gas resources are not large, mostly difficult access, and their development has been stunted by political and security concerns. Shale gas and shale oil potentials in Syria are however large, but like conventional gas resources are impossible to develop at present.
The country’s hydropower and water resource potential is also large, but any claim that Syria is a “resource-rich jewel” to be liberated, democratized and brought to market as soon as possible – but possibly not Libya-style – is way off the mark.
The nearest-term regional economic role for Syria is development of its agriculture potential, which has been attempted by the father-and-son el-Assad regime, since the 1980s but bad planning, execution and management, and endemic corruption inside the regime only resulted in Syria attaining exporter status in a major agrocommodity (wheat) for a few years in the 1990s. Since that time Syria has tilted back into food import dependence – exactly like Saudia Arabia and the Gulf states whose leaderships pretend to believe in Syria becoming “the Arab world’s bread basket”, under strict Sunnite rule, of course.
Energy resource or energy transport issues are unimportant players in this regime-change experiment, but in a recent Market Oracle posting on the supposed energy drivers behind regime change, William Engdahl writes: “Huge gas resource discoveries in Israel, in Qatar and in Syria combined with the emergence of the EU as the world’s potentially largest natural gas consumer, combine to create the seeds of the present geopolitical clash over the Assad regime”.
He continued: “Natural gas is rapidly becoming the “clean energy” of choice to replace coal and nuclear electric generation across the EU most especially since Germany’s decision to phase out nuclear after the Fukushima disaster. Gas is regarded as far more “environmentally friendly” in terms of its so-called “carbon footprint.”
Too Much Gas – Too Many Pipelines
Huge unconventional (deep offshore) gas reserves have been discovered, and proven or are in the process of being proven in the territorial waters of the following countries:
Israel, Palestine, Egypt, Cyprus, Azerbaijan.
Several other close-by countries are highly prospective, meaning likely also to possess very large reserves of deep offshore gas, called “stranded gas”. This only concerns local and regional, eastern Med and Caspian unconventional gas resource finds: worldwide finds are truly massive, and concern all continents. Any talk about world gas shortage, or control of gas resources by a small number of countries mostly hostile to the West has been exploded, since 2007-2009. This real world state of facts has yet to filter through to Think Tank strategists, deep in their bunkers mulling 1970s-vintage energy crisis issues with a Cold War mindset, in which War on Terror was as unknown as global stranded gas and shale gas resources and reserves.
As recently as 2008 and playing a major role in the setting of Europe’s climate-energy package of policies and programs basically seeking energy independence and energy security, the dark shadow of these Cold War-era energy crisis issues – now bolstered by Al Qaida shadows, played a major role in the European quest to reduce gas import dependence by any means. Increased dependence on Qatari gas, let alone Libyan, Algerian, Russian and Norwegian gas – Europe’s 4 largest pipeline gas suppliers – featured nowhere in this 2008 plan, and was in fact the exact opposite of the plan’s published goals.
The basic reason for this, despite the energy security, geopolitical and terror war trimmings, is economic. Europe’s 4 largest pipeline gas suppliers, utilising an already overcapacity pipeline system feeding Europe, with zero need for pipeline capacity growth, operate “oil indexed prices” for gas. In simple terms this prices gas imports to Europe at up to $16 per million BTU, equivalent to oil at $92.80 a barrel. US gas prices this year have average about $2.50 per million BTU before a very recent “surprise comeback” to a little over $3.
Importing either Israeli gas (after 2020-2022 when the gas is developed) or Qatari gas through a hypothetical trans-Syria pipeline would have no interest at all to Europe, unless their offer price fell well below current prices operated by the 4 largest pipeline suppliers.
Possibly unknown to the deep-thinking Think Tank community, too often based in the US – the southern, south-eastern and eastern European regions are now criss-crossed with gas pipelines at a variety of stages: existing and operational; in construction; planned and in project. The major problem is not the transport capacity – but filling the lines at prices Europe is prepared to pay. Many pipeline projects are now on hold, not for geopolitical reasons, but because at the same time and rapidly, LNG re-gasification terminals are under construction in all coastal EU27 states. Rates of construction are so fast, despite high costs, that certain countries such as France will by 2015-2016 have sufficient LNG terminals to handle LNG imports covering entire national gas consumption needs. At the same time, gas pipeline capacity to northern and western Europe, including France, continues to grow.
World LNG supplies are on an unstoppable upward growth track, running at well over 20% per year, as LNG suppliers and potential suppliers also grow at an unstoppable rate. Under any hypothesis, LNG prices will be far below present European and Asia gas import prices and will surely and certainly force down global gas prices. Arab suppliers of LNG such as Qatar will have no dominance in the coming global LNG supply system and will be price-takers, due to the vast size of new stranded gas resources discovered and proven in countries such as Mozambique, Tanzania, west African states, Australia and Brazil, as well as the eastern Mediterranean “new gas” countries. Gas shortage does not exist.
Pipelines (and Gas) the World Doesn’t Need
Energy resource shortage in Europe is decreasingly on the menu, and hard to defend under any rational study of European regional, west Asian, MENA (Middle East and North Africa), African and world energy resource potentials. The former dominance of oil from Arab states, and gas from Russia was in any case the focus of European Commission and member state energy policies – with the target of diversifying energy sources and supply sources – since the 1960s and has continued and intensified ever since. The current supposed “CO2 based” clean energy policies of the Commission, enacted as energy law in the member states since June 2009 (but in no way cast in stone) only push the quest for energy independence further. These long-term policies, concerning gas, have been responsible for the massive growth of pipeline gas capacity to Europe – which is now accompanied by the massive growth of LNG import terminal capacity, to feed national based gas pipelines, all of which are interconnected in continental Europe.
Related to the Syrian regime change experiment, or simply the grisly end of a Mafia-type Arab dictatorship, getting rid of el-Assad is in no rational way the signal for yet another, one more, high cost natural gas pipeline linking West Asia and Europe – this would certainly be one more underutilized or even useless pipeline! Taking overpriced Qatari gas, by pipeline, is for the least eccentric: Qatar is able to export LNG to Europe at high prices, already.
The real interest is to force Qatar to cut its prices – which will happen, however many football teams and luxury hotels the “western-friendly” Qataris can buy to curry favour with European political, media and corporate elites.
The claim that the only “realistic way” that EU governments, from Germany to France to Italy to Spain, will be able to meet EU mandated CO2 reduction targets by 2020 is a major shift to burning gas instead of coal, is also unreal on technical grounds. This claim ignores the complex realities of EU27 energy, and world energy – especially fast-evolving technology in power generation.
Heavily criticised by the Greens and Climate Crazies, Germany’s decision to build more coal-fired power plants takes no account of the Syrian situation, but pays plenty of attention to the fact that even if gas-fired power plants can reduce CO2 emissions by 50-60% over conventional coal-fired plants, they are distanced in CO2 reduction performance by new generation clean coal plants, like IGCC power plants developed and built, in Germany – by Siemens.
Replacing old coal-fired facilities with IGCC technologies can reduce Germany’s current coal power related CO2 emissions by 40 million tons per year for the same amount of power supply (about 46% of total German power supply). For the US, Siemens pitches “clean coal” as follows.
German hard coal resources, notably in the Ruhr basin, are now a highly politicised issue also confused by technology issues – especially concerning in situ underground gasification by fracking, extending to much greater depths than economically extractable “physical coal”. Even in IGCC power plants “physical coal” would emit as much, or more CO2 per unit kWh of electric power generated as gas-fired plants using gasified coal, making coal gasification a major focus of German energy R&D. Resource estimates for German remaining coal reserves range from as high as 75 to 100 billion tons coal equivalent, to less than 500 million tons, due to the politicised spin – very like the “imaginative” estimates of recoverable oil reserves in Arab countries of the Middle East, which always increase, on paper, at any time of geopolitical stress like the present.
Similar politicised and radical variations of coal reserve estimates apply to Poland’s USB, Ukraine’s Donbass and Russia’s western coalfields. Under any rational scenario however, these European coal resources could cover 350 – 500 years of current European and Russian coal needs.
The need for any kind of energy transported across Syria’s frontiers – either oil or gas – is zero in Europe.
We should ask here that Washington and London’s brain-trust take note then, and think about ceasing to promote a bankrupt drive to break yet another nation state – and for the wrong reasons, whilst risking wider regional instability through their own reckless efforts.
21st Century Wire
Obama has been carrying the AFRICOM ball down the field after the directive was launched under George W. Bush in 2007. Washington DC, led by African Secretary, Jonnie Carson, speaks to its public at a level deserving of an uninformed, Helen Keller-esque populace, claiming that Somalia was ‘a big success’ because Washington spooks spent $500 million backing an “African Proxy Force” that allegedly “drove out al Qaida” in that country. And it is no coincidence that massive untapped oil reserves in the Puntland region in northeastern Somalia were recently announced in early 2012.
Just as Washington’s corporate interests are hidden behind ‘humanitarian interventions’, the UK Prime Minister David Cameron will run the same facade. Last February he hosted an international conference on Somalia, where he pledged more aid, financial help and measures “to fight terrorism” in Somalia. Cameron does not tell you that those so-called terrorist forces are funded and supported, and ultimately steered – by the western intelligence agencies – whereby they control all sides of the local conflict. Note they are using the same recycled narrative in Mali now, fighting “Islamic extremists” there – promoting freedom and democracy in the region etc.
Mali’s vast potential wealth lies in mining, agricultural commodities, and oil – and these proven reserves are not currently exploited. Interestingly enough, Ghana and Mali together account for 5.8% of total world gold production. These assets are the true focus of US and UK interests in Africa – not humanitarian concerns.
The 2012 Somalia Oil Conference was a mere pre-negotiation meeting to discuss how oil assets would be divided up between the US, UK and other remaining energy players – demonstrating what is the real agenda with AFRICOM. Obama supporters will naturally give this President a free pass on Africa because he is of part African descent, not realizing that he is running the exact same agenda as his Republican predecessor. What corporate agents like Jonnie Carson does not tell electorate plebs is that the US has recently infested itself in Libya, Uganda, Somalia, North Sudan and elsewhere, and now has its eyes set on Mali. The initial goal of US domination of Africa is outlined in the AFRICOM documents, and names the eviction of China from the continent as task number one.
Africa Pulse spells it out: “Strong economic growth in the past decade among African countries rich in oil and minerals has failed to make a significant dent on their poverty levels, according to a World Bank report.”
In other words, the Anglo-American imperialists would like to eliminate competition for Africa’s bountiful resources, continuing a centuries-old policy of raping the Dark Continent and leaving nothing but perpetual internal strife and poverty behind.
U.S. looks to effort in Somalia as model for Mali solution
Anne Gearan and Craig Whitlock
The Obama administration is contemplating broad military, political and humanitarian intervention to stop a slide toward chaos and Islamic extremism in Mali, the top State Department diplomat for Africa said Thursday.
The international but largely U.S.-funded effort to expunge al-Qaeda-linked militants and restore political order in Somalia could present a model for Mali, Assistant Secretary of State for Africa Johnnie Carson said.
Since 2007, the United States has spent more than $550 million to help train and supply an African proxy force of about 18,000 soldiers in Somalia, which has brought a measure of stability to the war-torn country for the first time in two decades.
Although the United States has not committed to replicating that approach in Mali, Carson and others are holding up the routing of the al-Shabab militia and conducting of elections in Somalia as a template for actions elsewhere.
“It’s a model that should be reviewed and looked at as an element for what might be effective in that part of the world,” Carson said in an interview, “but it’s not there yet.”
The Somalia comparison offers the clearest view yet of U.S. thinking about the growing terrorism threat from Mali, a landlocked West African country the size of Texas that has imploded politically since a military coup in March.
As in Somalia, the threat to the United States and other countries from Mali is wrapped in a larger problem of lawlessness, poverty, tribal friction and weak governance.
Somalia adopted a provisional constitution in August, and a new federal government was formed after years of chaos that had fueled terrorism, piracy and famine. Security has slowly improved under the proxy force, which is led by the African Union but bankrolled and trained by the United States, European Union and United Nations.
Carson said the internationally backed plan for Somalia’s political reconstruction was working because the country’s neighbors, the United States, E.U. and United Nations had subscribed to a common set of goals.
He cautioned that a regional and international consensus would be required for the approach to work in Mali. “There needs to be that kind of a clear understanding there as well,” he said.
Mali’s military quickly lost control of the country after the March coup, which was led by a U.S.-trained army captain. Since then, Islamist militias affiliated with al-Qaeda have imposed strict Sharia law in northern Mali and, along with Tuareg rebels, declared an independent state. Hundreds of thousands of refugees have fled their homes.
Last week, the remnants of Mali’s central government, France and west African nations led calls at the United Nations for the creation of an African-led force to help Mali confront the militants.
The Economic Community of West African States has said it is willing to send about 3,300 troops to Mali if it gets the backing of the United Nations and Western countries.
The United States has been leery of a French-backed proposal for quick deployment of an internationally backed African force in Mali, preferring a more comprehensive plan that addresses underlying political problems and tribal divisions.
“We want to make sure that it is an African-led international response, and also be very clear that whatever is done out there should in fact be well planned, well organized and well financed,” Carson said.
The U.S. diplomat has also said that it is important to enlist support from Mali’s northern neighbors, especially Algeria and Mauritania, which share a long border with the troubled country and have also fought their own long-running Islamist insurgencies.
U.S. officials have ruled out sending American combat troops to Mali but have said the Obama administration could help train, equip and transport an intervention force drawn from other African countries.
“There will be a need for some type of security response,” Carson said, adding that the United States could support one if it is drawn up correctly.
Source: Washington Post
He’s a hero in his homeland – but portrayed as a bogeyman by western governments.
The election triumph for Hugo Chavez in Venezuela for a remarkable fourth time means he’ll continue to polarise opinion as President.
And as RT’s Lucy Kafanov reports, the way he uses the nation’s oil wealth will ensure he’ll remain a thorn in the side of Washington.
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.
Editor’s Note: The energy policy debate is always front and centre in the run-up to any US Presidential election. Indeed, Mitt Romney will pander to Big Oil as patronage for their promise to help put him in power. But it’s clear in 2012 that fossil fuel strategies still shape US foreign policy, but now need to take a back seat to a multitude of alternative solutions now emerging in the 21st century. No real progress can be made however, until Washington is released from the stranglehold of industrial and petroleum lobbyists – and that’s why the debate is likely end in another stalemate. The technology for automobiles to achieve up to 100mpg has been available for the best part of 100 years, but it has been suppressed, as has more rapid developments in other technologies, thus allowing the oil cartel to fix prices and consumption numbers for maximum profit and environmental damage and in partnership with the government who seeks to maximise tax revenues on all fuels. Here’s a bigger problem: more than a decade on from the ‘Enron revolution’, rising energy costs are presently killing American household budgets, yet, the technology exists today for every home to be at least half self-sufficient and independent of a central energy distribution grid (currently eating up a large portion of low to mid income earners’ living costs) – at a fraction of the cost. The ruling system needs a re-think its planned obsolescence and political operating procedure first, if real reform and benefits can be realized for the next generation. We can, and should do better.
Kristina M. Johnson
The Energy Information Administration’s 2012 Annual Energy Outlook forecasts on page 170-171 that North America can produce 3 million barrels per day of liquid fuel from unconventional sources such as energy crops, coal, natural gas and bitumen (oil sands). This will add another 1.1 billion barrels per year of production, still leaving the USA and its territories .6 billion barrels short of projected demand (7 billion barrels) in 2020.
That means, even if the USA consumes all the oil produced in North America in 2020 from conventional and unconventional sources, we would still need to import .6 billion barrels from overseas.
If Mexico and Canada’s consumption is included (roughly 1.7 billion barrels), then we would need to import 2.3 billion barrels, or 33% of our oil from overseas.
That’s why a fossil-fuel only energy strategy doesn’t add up.
In Governor Romney’s nomination acceptance speech, he referred to a five-point plan for America. The first point calls for making the U.S. “energy independent” by 2020. I’ve read the “Romney Plan for a Stronger Middle Class: Energy Independence.” It just doesn’t add up.
The Romney plan would still have the U.S. relying on imported oil — from Mexico and Canada — to meet our projected oil needs in 2020. However, according to the Energy Information Administration 2012 Annual Energy Outlook, the total U.S., Mexico and Canada combined annual oil production from conventional sources (roughly 5.3 billion barrels) is still 1.7 billion barrels short of estimated U.S. projected consumption in 2020 (roughly 7 billion barrels). Furthermore, the Annual Energy Outlook projects that the total petroleum production from conventional and unconventional (energy crops, coal, natural gas and oil sands) sources will total 6.4 billion barrels per year in 2020. This is still .5 billion barrels short of the total demand of the U.S. and .6 billion barrels short of the U.S. and it’s territories. If the oil consumption of Mexico and Canada is to be met with North American production, we would be 2.3 billion barrels short, requiring us to import 33 percent of our oil from overseas. Not exactly energy independence.
If that bad math doesn’t disqualify the Romney “energy independence” plan, its simplistic “bet-the-farm” reliance on fossil fuels surely does. Oil takes hundreds of thousands of years to form. But with his plan, it won’t take very long at all to burn up our children’s and grandchildren’s natural resource inheritance. Future generations probably won’t be better off with fossilized, business as usual policies.
President Obama’s plan — not just proposed but underway as we speak — emphasizes energy efficiency and conservation. It utilizes natural gas as a potentially good bridge to alternatives including nuclear and renewable energy. Whereas Romney’s plan reads like a potpourri of delicious treats for the Big Oil lobby, President Obama is actually working with industry to make progress with his “all of the above” energy strategy. Just last week the administration and automakers established a new fuel economy standard for 2025 of 54.5 mpg. And the much-maligned Obama “stimulus” program for energy is laying the foundation for lightweight, hybrid and electric vehicles. These policy and technology innovations allow cars to go farther on a gallon of gasoline, helping to close the gap between North American oil production and consumption, thus making our energy use sustainable. So how can Mitt Romney blame President Obama for high gas prices and do it with a straight face?
The critics may have been too hard on the Republicans when they said last week’s convention failed to produce clear messages about what the party wants to do and a clear portrait of its nominee. I think it’s clear. Whether it’s the Romney promise to “empower states to control on-shore energy development,” or letting the states decide if poor people get health care through what is now Medicaid or how to best compete with China and India, to mention two, in educating our young people, there’s a very simple way of explaining it. It’s just outsourcing by another name. But as President of the United States, you can’t outsource leadership. The person occupying the Oval Office must implement a comprehensive energy strategy that is focused on achieving energy security and a cleaner environment. This will require a stable, national energy policy.
Kristina M. Johnson is the former Under Secretary of Energy, United States Department of Energy and currently CEO of Enduring Hydro, a clean energy company focused on hydropower.
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.
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